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Portland downtown facing slow exodus

By Oregon Small Business Association,

The vacancy rate in Portland’s central business district hit 19.4 percent during the first quarter of 2021, while the city’s overall vacancy is 14.7 percent. But real estate officials expressed optimism for improvement in the next year or two—especially when compared with the decline of the past year.

Numbers are still likely to look dim in the second quarter, but optimism and movement in the market will be reflected later in the year and during 2022 and 2023, according to Jacob Pavlik, Colliers real estate’s research manager, who was interviewed by the Portland Business Journal. The market’s net absorption shows a negative 900,476 square feet during the first quarter of the year, according to Colliers, far below the levels before onset of the coronavirus pandemic.

The Portland Tribune commented on Portland downtown decline, “State economist Josh Lehner pointed to the combination of business closures, less foot traffic and lower demand for office space as key factors in declining construction activity. Lehner said leading demand for office, retail, and leisure and hospitality space would need to rebound considerably for vacancy rates to decline and rents to increase. In his outlook for this year, Lehner noted that “it’s going to be a while before we build another office building,” and that Portland now ranks 66 out of 80 in national commercial real estate markets, according to a new report by PwC and the Urban Land Institute.”