Industrial

— By Kenny Houser and Mike Hale, Principals, Capacity Commercial — The industrial real estate sector has experienced a noticeable deceleration with a decline in leasing and sales activities. This trend is particularly evident in Portland where commercial property sales transactions have been steadily decreasing. There was a quarter-over-quarter decline of almost 29 percent in the second quarter of 2023, resulting in a sales volume of $3.4 billion, the lowest recorded since late 2014. The Federal Reserve’s decision to pause its rate hike campaign in response to inflation concerns has impacted the market. With borrowing costs fluctuating, the disparity between buyer and seller expectations has created challenges in determining agreeable property valuations. Simultaneously, leasing activity has also slowed, indicating a return to normalcy in Portland’s industrial market. Total deal volume in the first quarter of this year reached about 1.7 million square feet, a 35 percent decrease compared to the average of 2.6 million square feet per quarter over the previous two years. Despite the slowdown in leasing, the limited amount of industrial space under construction in Portland is expected to maintain a balance between supply and demand. The current construction activity accounts for 1.1 percent of the total inventory, …