While unemployment rates reached a high 13.2 percent in April 2020 due to the pandemic, unemployment has gradually fallen since then, standing at 5.9 percent in second quarter 2021, according to the Federal Reserve Bank of St. Louis. And, the Portland economy is slowly bouncing back in 2021, as the state fully reopened on June 30.

As those local businesses reopen, there is optimism that strong consumer spending will drive the Portland economy forward in 2021. Moreover, vaccine levels have approached the point where most office buildings in the Portland market have fully reopened.

Although office direct vacancy rates increased to 10.5 percent, up 40 percent year-over-year due to COVID-19, signs of renewed leasing activity have resurfaced in the market. Kidder Mathews expects a more pronounced spike in touring and leasing activity in the following months.

Meanwhile, net absorption reported positive 1.24 million square feet by the end of second quarter 2021, according to Kidder Mathews’ latest Portland office report. Leasing activity rose 12 percent year-over-year to 819,135 square feet through the end of the second quarter 2021. Total class-A lease activity reached 351,267 square feet with sublease activity standing at 41,492 square feet.

Asking lease rates remained stable, reporting $28.02 per-square-foot full service by the end of second quarter 2021. Construction projects remain active with more than 1.34 million square feet of office developments in the pipeline. Nike’s North Expansion project in Beaverton, totaling 1.90 million square feet, just delivered in second quarter 2021. Under construction projects in Portland include the Adidas Expansion (425,000 square feet) and 503 on Tenth (269,908 square feet).