Market Reports

— By Josh McDonald, Executive Vice President, CBRE’s Institutional Multifamily Investment Services — Recent data points to positive trends in Portland’s multifamily leasing market heading into the summer months. The rebound in absorption and declining new supply — primarily driven by an active suburban renter base — highlight the resilience and growth potential of the local rental market.  The positive leasing trends in Portland have contributed to create an increase in recent investment sales opportunities. Strong leasing performance, as indicated by elevated absorption rates and demand for rental properties, often translates into positive investor sentiment and heightened investment activity in the multifamily sector. This may signal to investors that the market has opportunities for solid returns and growth potential.  The green shoots in seasonal leasing are weighted in the suburbs with demand accounting for more than 65 percent of the net change in occupied units, emphasizing a strong preference for suburban living. With more than 3,100 units absorbed in 2024 already, the year is on track to surpass the full-year totals for both 2022 and 2023. This may potentially exceeding the 10-year average as well, according to CoStar. Denser urban areas and the Central Business District also experienced an increase …

— By Daniel Natsch, Senior Managing Director and Partner, Ethos Commercial Advisors — Portland made it onto the national scene even before the last economic cycle. It’s a charming and relatively inexpensive West Coast market that boasts a great culinary scene, never-ending outdoor activities and its own sense of weirdness. It’s no wonder that Portland’s ticket to the “big time” came by way of population growth throughout the 2010s, spurred by young, highly educated professionals. Alongside that growth came the need for more housing. Institutional capital took note and began targeting Portland for investment. The development boom of the 2010s eventually began to slow. Portland’s multifamily industry took another blow when Inclusionary Zoning legislation was passed. To beat affordable requirements, developers grandfathered as many projects as possible, creating a huge wave of entitled properties. Many of these projects would see their way through permitting, and the pre-inclusionary housing moniker became more valuable to investors. At the time, it appeared that significant in-migration would offset the significant deliveries stacking up in the pipeline. Then came 2020. Downtown Portland became a ghost town as employees stayed home amid the pandemic. It was quiet until large crowds took to the streets to speak …

By Jordan Carter, Executive Vice President, Kidder Mathews Much like the city itself, Portland multifamily owners are no stranger to adversity — whether that refers to the weather, news media or the instability of today’s economy. There’s no doubt the rising interest rate environment will have an impact on the lending market for both refinances and sales in the short-term, but the good news is market fundamentals in the Portland metro remain solid.  At 4.53 percent, our vacancy rate sits well below the national average of 4.98 percent, per CoStar. The average apartment rent is now $1,600 per month, thanks to year-over-year rent growth of 8.5 percent, which CoStar projects to remain near 5 percent for the next couple years.  New construction, which peaked at nearly 13,000 units in 2018, has slowed dramatically due to legislative and policy changes that have disincentivized developers. These challenges have been magnified by elevated material costs and an arduous permitting process. Year-over-year deliveries of 4,000 units illustrate the dramatic slowdown, as they’re well below the supply needed to meet a demand of more than 10,000 new units annually. The hot single-family home market also continues to push prospective home buyers out of the market. …