Region Wide Industrial Vacancy Flirts With 10%

PORTLAND-Led by the flex-tech market, the region’s industrial vacancy rate rose for the fourth straight quarter, with the overall average hitting 9.9% by the end of September, up from 9.2% at the end of June and 7.8% one year ago, according to the latest report from Grubb & Ellis.

Five of the region’s 11 submarkets posted third quarter vacancy rates above the overall average. The highest vacancy rate, 14%, was posted in the 8.2-million-sf 217 Corridor/Beaverton submarket, followed by the Sunset Corridor (20 million sf; 12.9% vacancy), NE/Columbia Corridor (21.3 million sf; 10.7% vacant), Clark County (12 million sf; 10.6% vacant) and Swan Island/Close-In NE (2.9 million sf; 10.4% vacant).

The submarket with the region’s lowest vacancy rate, 4.2%, is the Port’s 9.9-million-sf Rivergate Industrial District, which not coincidentally also has the most speculative construction underway. Trammell Crow is building nearly 500,000 sf there on behalf of Multi Employer Property Trust, which invests union pension fund dollars. MEPT also recently tied up another 26 acres at Rivergate that will become 600,000 sf of distribution space.