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Report Finds Tech Companies Have Outsized Impact On Portland Office Market
Dated: September 17 2015
Tech companies had an outsized impact on the market for Portland office space in 2014, accounting for more than a third of the top leasing transactions, according to a report released Wednesday by the commercial real estate brokerage CBRE.
Demand for office space is so strong, the report says, that speculative construction is on the rise for the first time since the Great Recession. Two recent examples are the nine-story Pearl West building under construction now (and whose tenants will includeJapanese digital graphics company Wacom) and a proposed 20-story toweron Southwest Broadway, both developed by BPM Real Estate Group.
Oregon has become "an appealing alternative" for tech companies looking to relocate from significantly more expensive markets like San Francisco, CBRE researchers found.
But "Portland's secret is becoming harder to keep," said Ajay Malhotra, a CBRE vice president who leads the company's local tech and media practice group, in a press release. The price of renting office space in the Rose City grew by 10.7 percent between 2013 and 2015, outpacing Seattle, Los Angeles and Salt Lake City.
The average asking annual rent in Portland's office market was $23.36 per square foot in the second quarter of this year, the report found. In the central business district, rents averaged $26.88 and there was a 9.9 percent vacancy rate.
"We continue to attract world-class talent and employers alike – from emerging startups to established technology giants who find Portland's tech savvy, quality of life and affordability very compelling," Malhotra said.
Portland's 16.1 percent job growth in the tech sector was good for 11th in the nation between 2012 and 2014, a marked improvement over the 12.3 percent growth between 2011 and 2013. The industry accounted for 24,497 jobs here in 2014 and 10.5 percent of office jobs.
"More companies are starting to look north to Portland," said Jason Green, managing director of CBRE's Portland office, in the release. "This increased demand has directly affected office rents as developers and owners move to meet the needs of the market."
Nationally, the report found an aggregate rent premium of 11 percent across the nation's top 30 tech markets.
For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 25+ years in the industry, Mark has gained experience in....
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