Portland Office Bounces Back with Renewed Optimism
The Portland economy slowly bounced back in first quarter 2021, as federal stimulus packages and COVID-19 vaccines were rolled out in the area. As local businesses begin to reopen with modifications, there is optimism that strong consumer spending will drive the Portland economy forward in 2021, according to a Kidder Mathews report.
Unemployment rates reached a high 14.3 percent in April 2020 due to the pandemic. Since then, unemployment has gradually fallen, standing at 6.2 percent in first quarter 2021, according to the Federal Reserve Bank of St. Louis.
As for the near-term outlook, Kidder says asking rental rates will fall slightly in the Portland office market, with vacancy levels plateauing towards the end of 2021 as workers return to the workplace and the vaccine becomes widely distributed. Office supply in the Portland market will continue to grow as owners lose out on tenants occupying buildings. A soft market will develop due to increasing supply and rising interest rates.
Construction projects remain active, with more than 2.3 million square feet of office developments in the pipeline.