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Local Market Forecast: Class A CBD Office Rate Will Rise 14%

PORTLAND, OR-Net office absorption nationwide is expected to total 80 million sf in 2006, pushing up asking rates. Locally, the average annualized asking rent for CBD Class A office space is projected to gain more than $3 per sf per year.

By Brian K. Miller | Updated on January 08, 2006

PORTLAND, OR-The average class A office rates in the Portland CBD will rise about 14% during the year, according to a 2006 market forecast by Grubb & Ellis Co. The prediction was wrapped into the publicly held company’s national forecast.

The national forecast predicts that job growth will result in 80 million sf of net absorption in the office sector despite 25 million sf of new supply, which will reduce the average national vacancy rate to 12.8% by year end from 14.5% at year-end 2005. In turn, that will push the national average asking rental rate up 5% in CBD markets.

With no new supply expected in Portland until 2007 at the earliest, G&E predicts that Portland’s average class A asking rate in the CBD will more than double the national average. The rate will have risen to $25.21 per sf per year by the end of 2006, up $3.08 per sf or 13.91% from the current average of $22.13, according to the G&E.

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