November 4, 2021

How the rise of E-commerce is affecting warehouse space in Portland

What is happening with warehouse and industrial space in Portland? This growing area of commercial real estate is currently booming because of the rise of E-commerce and several big players that are putting downward pressure on the market all the way down to small local businesses. In our latest video NAI Elliott broker Chris Lio shares who’s being affected by the growth in E-commerce and why.

Locally and nationally, the warehouse sector of commercial real estate is being impacted by the rise of E-Commerce. And it’s not just Amazon, but the ancillary companies that fit into that network as well. E-commerce is exploding as most companies continue to move much of their business online. As those companies continue to grow, so does their need for larger and larger facilities. E-commerce companies are either retrofitting existing warehouse space, having something built for them or in some cases buying land and handling the development themselves. In each case, it’s taking away from the existing supply of warehouse buildings and industrial spaces.

In Oregon in particular, we have the constraints of the urban growth boundary which limits the options when a business is looking for industrial space for warehouses. This downward pressure not only impacts large companies, but it even effects locally owned companies looking for small spaces.

The market in Portland was tight before the pandemic and it’s continued to tighten. Development cycles have not provided extensive amounts of additional space, meaning there’s not enough new warehouse space being built in Portland and the surrounding areas to meet the demand.

So, what does a land grab from large E-commerce companies mean for other company’s looking for space? If you’re an existing user looking to expand, you should be prepared for a market that’s more expensive than it was 3-5 years ago and a limited number of options that will fit your requirement. Options from 10,000 feet to 100,000 feet throughout Portland and even into the suburbs are going to be minimal. Experts like Chris continue to successfully negotiate deals for their clients and having an experienced broker on your side is more important than ever if you’re looking for warehouse space in Portland.

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