Low vacancy rates in the Portland retail, office and industrial real estate sectors have made the city a good choice for investors looking to put money back into the market.
|
The success of the new H&M store in downtown Portland is indicative of a relatively strong retail market. // Photo by Teresa Meier |
Low vacancy rates in the Portland retail, office and industrial real estate sectors have made the city a good choice for investors looking to put money back into the market.
In a recent forecast of commercial real estate, Portland placed in the top 10 U.S. cities for office, retail and industrial real estate investment opportunities. The report, released by Grubb & Ellis, a Portland commercial real estate firm, found Portland to have an overall vacancy rate of around 10%. This placed Portland third on the report’s list of 47 cities, just below New York and Washington, D.C., for investment opportunities.
Portland fared best in retail, with a vacancy rate of 6.1%. New York ranked first in that category at 2.0% and D.C. was second at 5.5%. The average vacancy rate for retail space last year was 10.9% nationally. Industrial vacancy rates in Portland floated around 8%, with New York and D.C.’s rates at 5.4% and 12.8%.
Thirteen variables ranging from forecasted population growth to median income and proposed number of jobs over the next five years were analyzed by researchers for the report.
While Portland may face high unemployment, it’s still considered a safe market for investors because the market was not overdeveloped when the economy went sour. “It’s more of a reflection about supply than demand,” says David Hill, senior investment specialist at Grubb & Ellis. “We never got overbuilt; the downtown in particular has shown more resilience.”
This is particularly true for the retail sector and is one of the strongest draws for companies wanting to enter the Portland market. With limited space, competition for national retailers is high. It took a deal two years in the making to bring retail clothing giant H&M to downtown Portland, which opened late last year. The space was formerly held by Saks Fifth Avenue.
“National retailers who want to get in Portland haven’t been able to,” says Hill. “It’s very difficult to find a space in the area to build new retail [space]. You can’t just keep building new buildings; the economics are not always there. The market here doesn’t move quite as fast.”
