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While the recession has reduced the demand for available, developable industrial properties in the Portland-metropolitan area, this is only a short-term phenomenon. In the past few years, Metro was charged with determining future expansion of the urban growth boundary. After months of debate, lines were drawn to outline urban reserves as well as rural reserves.

The long-term outcome of these decisions will be limited to expansion development, which will undoubtedly occur only as money becomes available to build infrastructure to support such growth (namely, sewer and transportation systems). Therefore, the potential supply of industrial land is basically stagnant. It appears that as the recession subsides and demand increases for industrial uses, pressure will again mount.

What can be done?

Because land-use policy has been set, it becomes even more imperative that policy makers, planners, community citizens and, in particular, business leaders, work together to help solve the issue of a lack of developable land. Incentives to redevelop brownfields should be revisited. Programs are needed to relax the extensive restrictions and costs of redeveloping properties within industrial districts. An example is the recent River Plan, which was amended and basically tabled until a workable plan would allow industrial redevelopment (expansion), or at least retention of industrial firms that provide family-wage jobs.

Other programs, such as the enterprise zone (at least within the city of Portland), the e-commerce zone and urban renewal districts, as spearheaded by the Portland Development Commission, are examples of attempts to foster growth in specific areas. Such programs aim to stimulate economic relief, which may have the potential to spur development, at least in the short run.

Transportation decisions also need policymakers’ attention for the effective use of industrial properties. The industrial real estate sector has two primary functions: warehousing and distributing goods, and manufacturing or assembling goods and related services. In Portland, a secondary market, these functions overlap; however, in most cases they are not compatible with other uses like retail and office.

Recent improvements in the Rivergate area (both highways and rail) have been beneficial for continued growth in that area. Other minor steps are being taken in the “management systems” of existing arterials, but the need to streamline freight movement still exists.

Distribution of goods covers a wide variety of needs, from large warehouse distribution centers to air freight delivery, small package delivery and delivery of perishable food items. These all can add to congestion.

Another question that often arises: How do we create land parcels for industrial users in need of 20-acre, 50-acre or even 100-acre parcels? Basically, it is not in the cards economically to assemble such parcels at competitive prices if our only choices are redevelopment of existing parcels.

However, the metropolitan community has at least one opportunity in the near future, and that is West Hayden Island. The Port of Portland purchased the roughly 800-acre property in the early 1980s and has another opportunity to provide a large industrial land parcel if the city and Metro allow the use to occur.

The plan is to create 350 acres of industrial land. This location has the distinct opportunity to achieve three primary purposes: enhance marine terminal use; provide rail service with an area large enough to load and unload large unit trains; and offer easy truck access to Interstate 5.

The land also could provide significant overall leverage to enhance the region’s growth. While the density and number of family-wage jobs would not be as great for this type of use as manufacturing, it would allow the greater metro area to continue to grow as a distribution hub serving not only the West Coast, but also Pacific Rim growth countries.

The Port of Portland also recently purchased the 700-acre former Reynolds Aluminum site in Troutdale. After extensive environmental cleanup, it is now in the beginning stages of development, as evidenced by the recent 70-acre FedEx project.

As an industrial real estate broker, it is becoming increasingly difficult to help firms move here or stay here. It’s more important now than ever to help planners and policy makers understand today’s market dynamics. Last year, there were 36 land sales in the metro area, and 34 were two acres or smaller.

While some parcels are available, gains in demand will leave supply extremely short. It is critical to ensure that “available industrial properties” live up to their description or can become available at competitive prices, at least with other regional markets such as Seattle and Salt Lake City.

The business voice must continue to reach cities, counties and Metro, as well as the two states directly affecting this metropolitan area, if our land-use plan is to be effective and allow controlled, and continued, growth.

Tom Dechenne specializes in leases and sales of industrial and land properties as an associate vice president at NAI Norris, Beggs & Simpson, a real estate brokerage and asset/property management company. Contact him at 503-223-7181 or [email protected].