Portland Rents Forecast to Ascend at Compound Annual Rate of 3% Through 2018
expanding at an 8.9% annual rate – the fastest in 10 years. Tech hiring also accelerated
as professional services firms and health care slowed.
Rates
2013, the highest in three years and vacancy was set at 2.9%—the lowest in
24 years that RCR has been monitoring.
rates (Q1 2014):
Class A – 5.0% vacancy
Class B – 3.7% vacancy
Class C – 3.7% vacancy
through 2015 but predicts vacancy rates will fall to 3% in 2016 and possibly lower
in 2017.
2015 – 96.8%
2016 – 97.4%
2017 – 96.9%
Rent Trends*
REIS reported a 4.0% year over year rent increase 2012-2013 among all properties while Axiometrics’ same-store surveys of stabilized properties indicated a robust 8.1% year-over-year advance. This was the strongest recorded in two years and indicates Portland may be resisting rent slowdowns widely being observed in other U.S. markets. Rents in Q1 2014 rose at an annual rate of 4.3%. Rent increases were sharpest in Beaverton (8.3%) and Tigard (9.4%) with competitive pressure in NW Portland keeping increases somewhat lower (5.7%).
Axiometrics reported that surveys of larger properties found considerably stronger rent growth averaging 7.6–the fourth consecutive annual metric exceeding 6%.
Red Capital reports that “We estimate Portland rents will rise at an above average 3% – 4% rate through Q3 2016 before slowing to the 1.9%-2.3% range.”
Rent Forecasts
11th best performing in the U.S. top 50 (2013)
2014 forecast: 3.7%
2016 Forecast: 2.5%
2017 Forecast: 1.9%
and Total Returns
from 4.5% to 5.2% while standard class-B assets were trading at about 5.5%
Expected total return 7.5%
18 Sales over $5 million
*Numbers in this report were updated in July 2014 with new numbers from RCR.