Trophy tenants can expect little relief in rental rates in the near future, in spite of near record levels of construction for the market in the last 12 months, more than 80% of the space coming online this year is likely to be pre-leased and vacancy in Skyline properties is now 8% and falling, down from a high of 9.3% in 2010.

Some building owners in Portland have done a good job in detecting the trend toward a widening premium in rents for trophy assets and positioning their buildings accordingly to capture today's demand, the firm says.

For example, US Bancorp Tower, which has transitioned successfully from a largely single tenant corporate headquarters building to become a bona fide tech hub with an enviable roster of technology tenants following the investment of $15 million in lobby and other upgrades, JLL says. New owners are in the process of repositioning KOIN Center and One Main Place with a view to returning them to trophy status.

“Owners who seize the opportunity and play to the strengths of their buildings will be in a good long term place as landlords. There is tremendous demand in the market and by appropriately positioning the amenities and appeal of their space to attract diverse tenant interest, owners can successfully tap that demand,” says Joe Vaughan, managing director, JLL.

And according to the firm,the price tag to buy an office building in Portland may be getting even more fierce. Investor appetite for core CBD office assets is at an all time high, JLL says. Sales transactions in the first quarter of the year surpassed total sales for 2014 and are on a par to reach levels not seen since 2008.

As for who is dominating the transactions, the firm notes that while domestic institutional investors have concluded most of the deals, foreign investor interest in Portland office assets generally is rising.

“This isn't surprising,” says JLL, “given Portland's tightening office market fundamentals and the sheer volume of foreign capital chasing Skyline office deals around the country.”

Of the $35.3 billion transacted over the past five quarters across the US, 34.6% was driven by international buyers.

In Houston and Seattle, every office deal transacted during this time period had a foreign buyer, while in Washington, D.C., Boston and New York, offshore capital led more than 50% of office purchases. In Portland, investors from Chile and Canada have competed for deals in the CBD.

“Portland's CBD office vacancy is among the lowest in the nation and investors are clearly taking note,” says Paige Morgan, SVP with JLL's capital markets. “We predict foreign buyers to invest $50 billion into U.S. commercial real estate in 2015, and they appear to be buying for the duration. This could have an impact on future Skyline liquidity in Portland where we continue to see a deepening pool of institutional investors,” she adds.

Morgan continues, “Going forward, domestic institutional investors may be forced to evolve their strategies, increasingly partnering with foreign investors and diversifying into non-core and non-CBD assets.”