Office Market Questionable in Oregon's Capital

SALEM, OR-Office vacancies in the state capital rose only slightly during the third quarter, but the confidence rate is dropping more dramatically.

Previous strength in the market has led to several projects that will have brought 151,324 sf of new office space into the market by year’s end–the highest level since 188,000 sf in 1995. But with vacancy rates rising from 8.7% to 8.8% during the quarter, according to the latest survey by Coldwell Banker Commercial LLC, and a record amount of space coming online, the development pipeline is shrinking.

Sources tell GlobeSt.com that development of some product is being put on hold because vacancy rates are likely going to rise through the fourth quarter, putting downward pressure on rents headed into 2001. Spence Powell, owner of the Salem office of real estate appraisal firm Palmer Groth Pietka, confirmed fears in the Statesman Journal newspaper last week, saying, “I know of at least three or four projects that have been shelved because the market is soft.”