The commercial real estate market is sputtering back to life in the Portland metropolitan area. A number of high-profile projects that stalled during the “Great Recession” have suddenly restarted, and several other large construction projects are also just getting under way. But according to commercial real estate experts, new construction is only half the story — vacant office space in the region is rapidly filling up, foreshadowing even more construction in coming years.
Work is underway at Hassalo on Eighth Avenue, the large mixed-use project on the superblock in the Lloyd District.
“Coming out of the Great Recession, it wasn’t a pretty picture,” said Scott Weigel of CBRE, which is regarded as the world’s largest commercial real estate services firm. “There were a lot of empty office buildings. Vacancy rates were as high as 30 percent. But we’ve returned to just about normal in the last 36 months, and now it’s getting hard to find a lot of empty [office] space in many areas.”
According to Weigel, office parks that have experienced turnarounds include Kruse Way in Lake Oswego and Lincoln Center in Tigard. Before the economy collapsed, they housed many financial firms involved in the real estate business. Now they are refilling with a more diverse mix of businesses, including some from out of state.
Weigel personally brokered the deal that moved Salesforce.com into a long-vacant office tower in the Synopsys Technology Park in Hillsboro. That single deal took 115,000 square feet of office space off the market.
The biggest exception, said Weigel, is downtown Portland, which currently has about 56 floors of empty office space. Much of that occurred when numerous federal agencies moved back into the renovated Edith Green-Wendell Wyatt Federal Building. But Weigel predicts the vacant downtown space will begin filling up soon. Already, he pointed out, several technology companies from San Francisco and the Silicon Valley are looking to relocate or expand in Portland.
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