How is the office market right now? According to NAI Elliot broker Riley Henderson, it’s mixed.
Before the pandemic, new construction supply was on a natural downward trend. This was a natural decline and it’s helped the office leasing market insulate itself and fill spaces as they come back on the market without having a glut of new supply to fill.
We are seeing asking rates decline in the Portland OR market for the first time since the Great Recession on 2008. They have been on a steady incline over the years and that has started to change direction since 2020. However there have been some unique sales of office buildings, particularly the Pittock Block which sold for $326 million, primarily because it serves as the main hub for internet service providers in Portland. This reflects institutional investors interest in seeking different and creative sources of revenue in an uncertain market.
Overall, Riley feels very bullish on the Portland market over the next three years. With a more diversified employment base, a number of IPOs looking to expand and new businesses that are up-and-coming that will need an increase in office space.
With so many bright spots, Riley is looking forward to seeing where the office market will head coming out of the pandemic.