The industrial real estate sector has long served as a foundation of stability and a magnet for investors. But after several years of booming demand fueled by e-commerce growth and supply chain reevaluation, the Portland, Oregon, and Vancouver, Washington, markets are showing signs of recalibration. Leasing and sale velocity are slowing, vacancies are ticking upward, and tenants are increasingly selective.
According to Director Chris Lio, one of NAI Elliott’s leading industrial brokers, “In most areas I would call the recent market ‘deliberate’ or ‘calm.’ A little more vacancy, a little slower rent growth, and some clear signs that tenants are weighing their options and not making significant plans for expansion while the national-level trade conversations play out.”
At NAI Elliott, we view this transitional moment as an opportunity to look beyond short-term market metrics and examine how industrial buildings are evolving to meet broader challenges—from automation and reshoring to climate resilience and global economic uncertainty. The next generation of industrial space is being defined not just by square footage, but by how well it integrates with today’s shifting economic, political, and technological demands.
COVID-19's Lasting Influence on Industrial Design
When the pandemic disrupted global supply chains, it also changed expectations around the physical design of industrial space. Developers responded by:
Increasing clear heights to allow for more vertical storage, reducing the need for horizontal expansion.
Designing wider column spacing and more loading docks per square foot to accommodate higher throughput.
Incorporating better ventilation and indoor air quality systems to improve employee well-being and retention.
Flexibility remains a critical design feature. Most speculative builds today are meant to quickly accommodate a range of tenants—from food packaging and clean tech to third-party logistics and light manufacturing.
Tariffs, Reshoring, and Market Headwinds
Geopolitical uncertainty, especially around tariffs, is creating volatility for many industrial tenants. Mike Mayer, a broker at NAI Elliott with a focus on industrial real estate, explains, “I spoke to a friend who owns a mid-sized company that imports from China, and he said if a container arrived Friday, you’d pay 145% in tariffs—but if it arrived Monday, it might be 30%. U.S. buyers can’t control arrival timing, so that unpredictability makes planning extremely difficult. It’s definitely impacting industrial demand.”
This kind of volatility discourages long-term commitments and adds a layer of risk that’s rippling through industrial leasing decisions.
Reshoring trends, while gaining national attention, have had limited visible impact locally so far. As Chris notes, “Reshoring may eventually affect things, but I’m not aware of anything significant yet in our market. What’s more relevant here is the historically low—just 1.4% according to CoStar—level of new industrial development. That limited pipeline may actually insulate our market from broader downturns.”
Where reshoring *is* occurring—such as in the semiconductor or EV sectors—it’s increasing demand for:
Power-rich facilities suited to high-intensity manufacturing.
Sites with access to skilled labor (e.g., Clark County’s technical training initiatives).
Entitled land ready for build-to-suit or retrofitting, which is increasingly scarce.
Automation and Smart Infrastructure Drive New Development Standards
Industrial facilities are evolving rapidly as automation becomes mainstream. In the Portland-Vancouver region, developers are adapting by:
Increasing floor load capacity to accommodate robotics and automated racking systems.
Installing data and energy infrastructure to support IoT, sensors, and backup power.
Planning ESG-conscious buildings with solar-ready roofs and EV charging stations.
Chris notes that while innovation is on the rise nationally, the Portland region’s pace of change is measured. “There’s fairly limited new construction right now, and most of it is still standard concrete-tilt. Developers have been focused on large-scale footprints rather than creative or incubator-style space for smaller businesses.”
Key Projects: A Glimpse at What’s Coming
Although the pipeline has thinned regionally, a few notable projects offer a window into where the industrial market is heading—both in terms of location and design priorities:
Portside Industrial Park (Port of Vancouver): This large-scale, master-planned development is located adjacent to the Port of Vancouver’s marine terminals and rail infrastructure. Designed for heavy logistics and intermodal operations, the project includes parcels suitable for build-to-suit warehouses and distribution centers. Its strategic location supports global trade routes while appealing to regional distributors looking to avoid congestion in larger West Coast ports.
Beaverton Creek Industrial (Beaverton, OR): Situated near Nike’s global headquarters and the broader Silicon Forest tech corridor, this new industrial development is tailored for light manufacturing, assembly, and last-mile logistics. The project prioritizes clean, high-efficiency space with expanded power capabilities and advanced HVAC—ideal for tech-adjacent users and suppliers supporting the semiconductor and electronics sectors.
Columbia Business Park Redevelopment (Vancouver, WA): This ambitious repositioning project takes aging Class B and C warehouse stock and converts it into modern flex and industrial space with upgraded dock doors, energy-efficient systems, and office components. Located just minutes from I-5 and the Columbia River waterfront, it reflects a broader trend toward maximizing the value of existing industrial land through thoughtful renovation rather than ground-up construction.
Development activity is continuing to migrate toward East Multnomah County and Clark County, where more flexible zoning, greater land availability, and public infrastructure investment are paving the way for the next generation of industrial nodes.
Portland’s Strategic Role in the West Coast Supply Chain
Despite short-term uncertainty, Portland maintains enduring strengths in the industrial ecosystem:
Deep Water Port: A rare asset between San Francisco and Seattle, ideal for global freight.
I-5 Corridor Access: Portland sits at the midpoint of the West Coast’s most vital shipping artery.
Intermodal Integration: The city’s access to road, rail, and marine networks makes it ideal for companies seeking regional coverage without coastal premiums.
As Mike points out, “Even in this tough environment, I’d rather be in the industrial space than some of the others. Industrial will make a strong recovery at some point in the future.”
Looking Ahead
This is a time of recalibration—but also of reinvention. As Chris observes, “There is still a fair level of activity on the tenant side and an active group of investors and users looking for opportunities.” However, those opportunities require a sharper lens. Investors are still active, but aggressive pricing and tenant hesitation are becoming the norm.
At NAI Elliott, we believe the industrial projects that will thrive are the ones built for the realities of tomorrow—not just the demands of today. Flexibility, infrastructure, labor access, and design innovation will continue to shape the market in Portland and Southwest Washington.
If you’re navigating investment decisions, site selection, or redevelopment opportunities, our team—Chris, Mike, and the rest of our experienced advisors—are ready to help you evaluate the right strategy for what’s next.
Authored by Neal Swanson, Director of Brokerage & Marketing at NAI Elliott
With contributions from Chris Lio, Director, and Mike Mayer, Broker – Industrial Specialists
