The industrial real estate market has entered a “period of recalibration” after rapid expansion since 2020, according to a new report from Cushman & Wakefield.

Developers have delivered more than 171 million square feet in warehouse, distribution and manufacturing space in the Pacific Northwest since 2020, and vacancies have risen as a result.

In the Portland market, vacancies have risen from 2.7 percent in the third quarter of 2023 to 7.8 percent in the first quarter of this year, Kidder Mathews reported.

“After an unprecedented period of growth, the Northwest industrial market entered a period of recalibration,” Cushman & Wakefield research manager Wescott Owen stated in a news release. “Developers are taking a more disciplined approach by prioritizing projects with clear tenant demand and long-term fundamentals, which will ultimately support a healthier and more sustainable market.”

Power availability is driving site selection as logistics operations compete with data centers, according to the Cushman & Wakefield report.

Tariffs have hit import-driven and export-driven industrial areas harder, with port-adjacent properties facing hurdles.

“A couple of years ago, if you could get a project built, you could feel pretty good about getting it leased pretty quickly,” said Brent Hedberg, president of Specht Development. “Today, demand is certainly slower and more selective. It’s not super-consistent. It’s low in some areas and high in others.”

Demand remains steady in Clark County, Washington, and the Sunset Corridor, Hedberg said. Close-in Portland, Airport Way and the Columbia River corridor are facing more challenging conditions.

On Thursday, Colliers revealed that Meadowlark Industrial Center, a 154,646-square-foot facility in Cornelius, had sold for $30 million, or approximately $193 per square foot. The brokerage stated that the sale demonstrated “investor appetite” for the Sunset Corridor submarket.

Tenants have become more specialized and are more likely to demand build-to-suit spaces than empty boxes built on speculation, Hedberg said.

A recent Specht project for Grainger, an industrial parts distributor, illustrates the change. The 533,000-square-foot warehouse in Gresham was built with robots in mind, including ultra-flat floor slabs, additional power and no skylights.

“The more companies look at automated robots to pick stuff, those are tougher to fit in a speculative empty box,” Hedberg said. “There are unique requirements.”

Speculative development still has a place, particularly for tenants who don’t want to endure long wait times and entitlement risk on a build-to-suit project, Hedberg said.

Tenants want taller, modern buildings with adequate space for trucks and LED lighting throughout, Hedberg said.

“There’s a bifurcation,” he said. “If you have second-generation space that’s just not quite what people are looking for, you’re having a little harder time.”

Owen also forecast that targeted future development could succeed.

“The recent slowdown may prove to be an overcorrection in certain segments,” he stated. “For developers and investors who can align product with evolving tenant needs, there will be opportunities as the market stabilizes and moves into its next phase.”

Broadly, tenants are wary of geopolitical disruption and — in Multnomah County — high taxes, said Jordan Schnitzer, president and CEO of Schnitzer Properties.

“When I started out decades ago, I didn’t worry about what was going on in China or Russia,” Schnitzer said. “People worry about that now. The ICE raids are scary.”

High interest rates and unrest are causing consumers and businesses to act more cautiously, Schnitzer said.

“People are just worn out from what’s happening nationally now and internationally,” he said. “What we need is consumer confidence so the consumer can buy the goods and services our tenants offer.”

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Project name: Salmon Creek Treatment Plant Phase 5A: Package 2 – Columbia River Effluent Pipeline

Location: Vancouver, Washington

Completion: November 2024

Cost: $20,017,343

Owner: Clark Regional Wastewater District

Engineer: Jacobs

General Contractor: Tapani Inc.

Submitting Company: Tapani Inc.

Subcontractors: A-Line Asphalt Maintenance, Abernathy, Able Fence, Advanced American Construction, Copper Mechanical, Glacier Drilling & Dewatering, Gonzales Boring and Tunneling, Grayling Engineers, HD Fowler, Industrial Inspection & Services, Karvonen Sand & Gravel, Longhorn Geomatics, North 40 Fencing, North Fork Landscape, Pauley, Tap Master, Tyeco Home Services

After years of strategic planning, Tapani has completed a major infrastructure project that will serve Clark County, Washington, residents for the next half-century.

The Phase 5A: Package 2 project at the Salmon Creek Treatment Plant involved installing approximately 6,000 feet of 48-inch effluent pipeline, creating a new treated wastewater outfall system with unique engineering challenges. This project was both significant and unique due to its complex route and engineering challenges. Unlike typical outfalls that simply discharge into water, this one had to navigate two fish-bearing rivers and pass beneath an active railroad.

The project included a bored crossing of the BNSF railroad, crossings of both Salmon Creek and Lake River, and connections to existing infrastructure. Tapani collaborated with Clark Regional Wastewater District (CRWWD) and engineers to redesign aspects of the project before construction began.

In a significant cost-saving measure, the team replaced the originally proposed steel pipe with high-density polyethylene (HDPE), saving CRWWD approximately $350,000 while reducing the project schedule by three weeks.

Safety remained paramount throughout construction, with all team members completing specialized marine training before work began. Advanced American Construction provided critical support by constructing a bridge capable of supporting heavy equipment, allowing access to otherwise unreachable areas.

The completed infrastructure will support long-term population and economic growth in Clark County while enhancing environmental protection of local waterways. By increasing wastewater management capacity, the system now accommodates projected growth for the next 50 years while ensuring compliance with environmental regulations.

The investment strengthened the community’s foundation for continued prosperity while preserving natural ecosystems for future generations.

“The Phase 5A/Package 2 project builds on decades of planning to ensure that the Discovery Clean Water Alliance could meet the region’s long-term wastewater treatment needs and continue to ensure public health, environmental quality, and the local area’s economic future growth,” Bob Sanguinetti, CRWWD district construction program manager, said in the Top Projects submission form.

This project did not have specific minority contracting goals or requirements. However, Tapani proactively sought opportunities to engage DBE, SBE and WBE firms, exceeding 12.5 percent utilization.

The successful Package 2 project follows Tapani’s earlier completion of Phase 5A: Package 1 at the same facility, continuing a multi-year improvement initiative for the region’s wastewater treatment capabilities.

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A $695 million bond measure to pay for construction of nine schools for Evergreen Public Schools has passed, according to preliminary election results in Washington.

Approximately 61 percent of voters approved the bond measure, according to the Clark County Elections office. In Washington, a 60 percent supermajority is required to pass school bonds.

The general obligation bonds will fund construction of a new elementary school and replacements for five elementary schools, a middle school and two high schools with new buildings at existing campuses. Other schools will receive various renovations and improvements.

“The voters have placed great confidence in the district by approving the largest bond in the community’s history,” Evergreen Public Schools Board President Todd Yuzuriha stated in a news release. “When combined with anticipated state matching funds and locally collected impact fees, more than $800 million in school projects will be completed over the next six years. Thank you to the community for your incredible support.”

The Evergreen Public Schools projects are scheduled to be completed by 2024. LSW Architects of Vancouver is serving as design consultant.

Two other major school district bonds were on Tuesday’s ballot in Clark County. La Center School District voters comfortably approved a $48 million bond measure for construction of a new middle school, conversion of the existing La Center Middle School into an elementary school and land acquisition. The bond passed with 65.61 percent of votes in favor.

However, Battle Ground voters rejected a $225 million bond measure that would have funded construction of six schools as well as other renovations and improvements to accommodate growth. With only 58.34 percent of votes in favor, the supermajority requirement was not met.

Final results will be certified on Feb. 23.

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Clark County, Washington, voters will on Tuesday decide three major school bonds that, if passed, would kick off nearly $1 billion of construction activity.

Evergreen Public Schools is asking voters for a $695 million general obligation bond that would pay for construction of one new elementary school and eight replacement schools as well as safety and security upgrades, roof replacements and heating-and-cooling upgrades throughout the 26,000-student district.

Battle Ground Public Schools has its own package: nearly $224.9 million for construction of a new primary school, a new middle school, four replacement schools, and other renovations and improvements to accommodate growth.

Meanwhile, La Center School District is asking voters for $48 million to build a new middle school, convert an existing middle school into an elementary school and enable the district to buy land.

For Evergreen Public Schools, the first three projects likely would be bid as a package, spokeswoman Gail Spolar said. That includes construction of a new, not-yet-named elementary school on a vacant, district-owned site at Northeast 39th Avenue and 162nd Street, and new school buildings for Image Elementary and Sifton Elementary.

Image Elementary would be rebuilt on a new site near Northeast 52nd Avenue and 131st Street. Sifton Elementary would be rebuilt near the existing school at 7301 N.E. 137th Ave.

Following those projects, new buildings would be constructed for three other elementary schools (Burton, Ellsworth and Marrion), two high schools (Mountain View and Legacy) and Wy’east Middle School. Also, Heritage High School would gain a new wing to replace 39 portable classrooms.

Evergreen is working off of a model elementary school building designed by LSW Architects of Vancouver. A standard floor plan would be adapted to fit each site, Spolar said.

Evergreen’s board in November voted to place the large bond request on the ballot. If successful, the build-out would last only a few years, Spolar said.

“We want to have all of those projects completed in a six-year time frame,” she said.

Evergreen officials calculate that the bond won’t increase taxes beyond current rates. That’s because of a change in Washington’s state funding model for schools. Property taxes in 2019 would total $6.16 per $1,000 in assessed value, or $1,848 on a $300,000 home, according to school district estimates. That’s down from 2017, when property taxes totaled $6.98 per $1,000, or $2,094 in assessed value.

“For the average taxpayer, in 2019, when the new bond would kick in, they would actually be paying less in school taxes than they are now,” Spolar said. “We’re paying off our old bonds from our 2002 bond measure, and there’s been a change in the state school funding model, so that drops some other local maintenance and operating taxes.”

The Battle Ground bond measure aims to reduce overcrowding and improve infrastructure and safety. A new primary and middle school campus would be built. Glenwood Heights Primary, Laurin Middle and both Pleasant Valley Primary and Middle schools would be replaced.

Battle Ground is growing as homebuilders push northward from the Vancouver area, district spokeswoman Rita Sanders said.

“We are the next place to build houses,” she said.

An outside consultant forecast enrollment in the district will increase by 1,535 to 2,740 students in the next 10 years. The district enrolled 13,153 students in October.

Much of the growth is happening in the district’s southern portion, which has the oldest schools, Sanders said. Glenwood Heights was built for 484 students but currently has more than 800, many of whom are placed in modular classrooms.

The bond measures must be approved by a 60 percent supermajority to take effect. For each school district, the bonds would need to be repaid within 21 years. Washington voters, unlike their Oregon counterparts, have until Election Day to postmark their ballots.

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Anne Anderson, principal engineer of Anderson Structural Engineering, in Vancouver, Washington, has won a lawsuit against the Clark County Community Development Department.

A Clark County Superior Court jury on Nov. 3 awarded Anderson $150,000 for defamation, $100,000 for discrimination and $1,100 for tortious interference. Marty Snell, Community Development director, said that no decision has been made whether to appeal the verdict.

The civil damages stemmed from accusations of gender bias and department staffers acting in ways that demeaned Anderson’s work and affected her practice financially. At trial, testimony revealed that the department altered her work without her knowledge and applied standards above state and international residential codes. Those violations led to a greater award.

“It was disappointing,” Snell said. “Some of the treatment was completely unacceptable. We need to treat our customers with respect and conduct ourselves professionally.”

Anderson works largely on single-family home projects in southwestern Washington and northern Oregon.

“They would want me to do the engineering to meet the IBC (International Building Code) for a commercial building,” she said. “They wanted these homes held to a higher standard.”

Anderson’s work met the International Residential Code, she said. It’s the standard regularly applied to residential structures in Washington and Oregon; however, it wasn’t good enough for the county, she said.

More training is needed as to when to apply the stricter building code, Snell said. It can be applied if elements of a structure warrant greater scrutiny, he added.

“There were expert witnesses on some of the building codes,” he said. “It was a mixed bag. The county was more in the right on one issue. Maybe there was a call that could have gone either way.”

One reason why the dispute ended up in court, according to Anderson, was a lack of communication.

“They wouldn’t work with me,” she said. “The only way I could be heard was through the courts.”

A series of emails were introduced that indicated the harassment of Anderson was considered sport. The county claimed that its nondiscrimination policy did not apply to internal communications even if the statements were derogatory and defamatory toward a single individual.

“Some of the email exchanges were less than professional,” Snell said.

Written and in-person communication with lawyers spanning more than five years failed to resolve the dispute, Anderson said. The case proceeded through the judicial process for more than two years.

“We had a very strong case,” she said. “I would love it if there were some changes in leadership.”

Changes are in the works, Snell said.

“The first thing that I mentioned on Tuesday morning with building staff was when we are working with people, just be professional,” he said. “There will be some things changing. It’s hard to say how quickly that will happen.”

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Clark County wants to build two new bridges over the Columbia River. County commissioners recently approved resolutions to set up two task forces over the next six months to study construction of two additional connections between Washington and Oregon. But neither light rail nor tolls will be included.

The failure of the Columbia River Crossing, a freeway megaproject to widen and modernize the Interstate Bridge, was a costly lesson, Clark County Council Chairman David Madore said. “Crippling congestion” on the Interstate 5 and Interstate 205 corridors has stifled interstate commerce, he said, but the light rail planned for the CRC would not have been an effective solution.

“The legislatures in Oregon and Washington spent a $200 million ‘tuition’ payment on a boondoggle and basically abandoned it with no tangible outcome except ‘what we can learn from the experience,’ ” he said.

The problem with the CRC, Madore said, was that it was proposed from the legislatures to the people. By setting up the task forces, the effort to find a new proposal will start with the people and work its way up to the legislatures.

In 2013, after the Washington State Legislature failed to pass essential funding for the CRC, Clark County voters approved measures to pursue the two bridges as long as they didn’t include tolls or light rail, Madore said. The East County bridge would be located between Interstate 205 and Troutdale, and the West County bridge would be west of Portland International Airport.

Troutdale Mayor David Daoust said he supports the effort.

“I see it as a long-term solution because it’s really limited (as to) what can be done in I-5 corridor and I-205 corridor as far as increasing capacity on those two,” he said.

Daoust also supported plans for the task forces in a letter to Clark County commissioners and mayors of Camas, Vancouver and Washougal in Washington.

“We want to join you in this positive vision for economic stimulus, jobs and industrial land development reasons, in contrast to doing nothing and living with stagnation and traffic jams into the future,” he wrote.

Wood Village Mayor Patricia Smith also supports plans to study new bridges across the river.

“It would have no light rail – just for cars and buses – and that would alleviate a lot of congestion and would enable (people) to take the bridge across and get on the MAX on our side of the river,” she said. “There would have to be a lot more information before anything begins to materialize, but this would be a good move. I think it’s great that Vancouver and us can work together.”

The two task forces will be guided by seven principles stated in resolutions passed by Clark County, Madore said. The first three are to protect and enhance the river navigation channel, interstate commerce and “the unity of our bi-state community.” The other four principles are to provide new freight corridors, reserve resources for future bi-state freight corridors, invite private-sector firms to help design and build the bridges and make sure any proposals are embraced by Clark County citizens.

Madore said each task force will include 10 community leaders from both states who will gather, study and then provide a recommendation in writing “for a community-supported design that can be fast-tracked, funded and constructed in a timely manner.”

Prospective task force members and experts interested in providing technical support can contact Madore via email at david.madore@clark.wa.gov. More information is available at: www.clark.wa.gov/councilors/county-seeks-leaders-fast-track-new-toll-free-bi-state-bridges.

Funding for the proposed CRC was flawed because it depended too much on federal dollars allocated for light rail, Madore said, but funding for the new bridges should come from existing gas tax revenues from both states.

“Nothing happens without vision and nothing happens without leadership and without a diligent commitment to work and do hard stuff,” he said. “That’s why we have the I-205 bridge today, because of collaboration on both sides of the river. It was a sensible funding mechanism that was toll free and used existing gas taxes.”

Madore said the goal of the CRC was “light rail at any cost,” but it would have reduced the navigation channel on the river without reducing congestion because most people would still drive their cars. He stated that only 3 percent of commuters use public transit.

“We could still have public transportation in the form of express buses, but light rail doesn’t make sense for Clark County,” he said. “We don’t have the density of a London or a New York City and we don’t have a high-population density center.”

Once the two task forces complete their proposals, the plans will be presented to the state legislatures as well as Congress, Madore said.

“People say, ‘How are you going to fund it?’ ” he said, “and it’s the same way we funded every other (major) project in Oregon and Washington over the last several decades: with existing gas taxes.”

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A task force of Clark County, Wash. business leaders is lobbying for state funding for freight- and commerce-oriented projects in Southwest Washington.

Members of the Vancouver, Wash.-based economic development organization Identity Clark County formed the Southwest Washington Freight and Commerce Task Force (SW FACT) after reviewing initial proposals for the latest round of state transportation funding, said Ron Arp, a member of Identity Clark County’s executive committee.

“Southwest Washington was almost completely overlooked,” he said. “We’d like to see our fair share in Southwest Washington of any funding packages that come forward.”

Identity Clark County, a nonprofit with approximately 80 members representing businesses throughout Southwest Washington, has spent the past nine months gearing up to launch the task force, Arp said. Members have already prioritized a dozen proposed transportation projects that they believe are important to freight and commerce mobility over the next 10 years. They plan to lobby state legislators and agencies to see that those projects are funded.

“The business community is definitely supportive of infrastructure projects, especially those that support freight and commerce,” Arp said. “They support existing businesses, they attract new businesses and it also improves safety and livability.”

Top priorities include: an overpass at Pioneer Street in Ridgefield that would create access to additional land for development; traffic capacity and flow improvements along Mill Plain Boulevard west of Interstate 5 in downtown Vancouver; and an effort to widen Washington State Route 14 in Vancouver, between intersections with Interstate 205 and Southeast 164thAvenue.

The task force has a couple dozen members and is seeking the support of more businesses and organizations. Prominent supporters include Vancouver-based companies Killian Pacific and Thompson Metal Fab and the Columbia River Economic Development Council, Arp said.

Parties interested in participating in the group can call Arp at 360-601-2991 or email him at rarp@amplifygroup.com.

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Contractor Robert & Olson breaks ground today on the first synagogue in Clark County. Congregation Kol Ami is the only Reform Jewish community in Clark County and has been sharing space in other churches for several decades, according to Kol Ami spokesman Jim Gladson. The new building in Northwest Vancouver, Wash., will be the congregation’s first permanent home.

“Now, thanks to the overwhelming commitment and generosity of our community, our dream, which has always been to have a rabbi and a permanent home, is becoming reality,” said Congregation Kol Ami President Cheryl Richards in a statement.

The 16,600-square-foot facility will include a sanctuary, a library, classrooms and administrative offices. The project will have a high efficiency HVAC system and low VOC finishes, but is not pursuing a Leadership in Energy and Environmental Design rating. Initial site work has begun, and the project is slated for completion by fall 2012.

Project team members include architect Richard Brown, engineers Olsen Engineering, Catena Consulting Engineers, PAE Consulting Engineers and Summit Building Engineering, Lango Hansen landscape design, LUMA Lighting Design, Altermatt Associates, Tad Savinar and Don  Hynes.

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Schneider Electric and Clark County thought the high volume of logging and forest activity in southwest Washington would make Vancouver, Wash., the ideal place to build a new biomass facility. Turns out, they may be wrong.

Since announcing in July that they were forming a partnership to build the plant, the county and the electricity technology company have run into several challenges. The most immediate was opposition from local neighborhoods and city planning officials armed with a list of zoning and environmental concerns.

But now there’s another snag in the plans: a hike in the cost of the locally sourced – and once relatively cheap – woody fuel supply.

If it moves forward, the 5-megawatt plant will be fueled by forest logging slash from privately owned properties within a 50 mile radius. In a feasibility study conducted this past spring, Vancouver consulting firm LD Jellison concluded that biomass would be cheaper to operate than the county’s existing natural gas-powered boilers.

Dave Sjoding, a renewable resources specialist at Washington State University who served as a third party expert in the study, said the facility would use logging residue that is usually burned in slash piles.

“It’s just wasted up in the woods,” he said.

But the Washington State Department of Ecology was recently called upon to clarify the statutes related to wood fuel and waste for an environmental analysis of another project, in the Puget Sound region. The resulting paper stated that wood fuel is not solid waste, which means, among other things, that the products are taxable.

“It’s an interesting turn of events,” Sjoding said. “It changes the rule book under which forest biomass functions – it’s not a waste stream headed to a landfill or being burned in the woods. Now the state of Washington decided it’s an actual product and said hey, let’s tax it.”

Peter Lyon, solid waste and financial assistance supervisor in the Department of Ecology’s southwest regional office, clarified that no changes were made to the code. It was just a clearing up of terminology as it is applied to environmental impact statements. Still, Washington’s biomass industry will be impacted.

“Six months ago (the forest debris) was not a taxable product, but now it is,” said David Palmer, Schneider Electric’s project manager. “It doesn’t help the project’s economics, but I think we can work around it.”

The company is still conducting due diligence for the plant and has not contracted for any feedstock yet, so the final economic impact is still up in the air. But finding fuel suppliers willing to commit to longterm contracts might be more difficult.

“(Schneider) is figuring out how to find a supplier for the next 20 years, so we need to figure out how much they are going to charge for the fuel and whether the projected pro forma works with that,” said Marlia Jenkins, program development manager in the Clark County budget office. Jenkins said the project could create up to 25 forest jobs in the region.

The project, expected to cost approximately $25 million, would modify an existing building located at the intersection of West 13th and Ingalls streets.

Schneider would build, lease, and operate the plant, which would provide central heating, cooling and hot water for five county buildings: the courthouse, jail, 911 center, Public Service Center, and juvenile courthouse.

Headquartered in France, Schneider Electric has focused mainly on institutional buildings in the U.S. because even on a site that the company considers most suitable, there is still a great deal of opposition.

“Overseas in Europe, (biomass) has been a big part of our energy projects, but here it’s not as widely adopted,” he said. “These projects are only a good fit in certain places, and this place is basically ideal in Clark County. It’s almost one of those things where, if we were to imagine the perfect site, it wouldn’t get much better than what we have now.”

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While key decision makers seem to be divided in Vancouver, Wash. – and Clark County – over whether to build a stadium to support minor league baseball, one local economic development group doesn’t see a downside.

The Columbia River Economic Development Council – a nonprofit focused on economic development in Clark County – has released an economic impact report on the $22.7 million stadium to attract the to the area. And while the stadium would need a public investment to move forward – in the form of an admissions tax – the group says the economic benefit would be worth it.

Through the group’s analysis, the new facility, which would be located at Clark College and open to the public, is expected to generate $206.5 million over the expected 20 years of public and private investment. About $126.5 million of that would come from the construction and operation as a baseball facility, while the other $80 million would come from the stadium’s other uses, like hosting regional sporting events.

The group also expects the project to create 280 construction jobs, 12 full-time positions and about 130 game day part-time jobs.

While most people seem to be supportive of the baseball team coming to town, some city and county councilors are concerned with the 5 percent admissions tax on things like movie and concert tickets. The tax is estimated to raise about $900,000 a year.

“We are encouraged that the project not only would create a significant boost to the economy through construction, but would continue to generate economic activity many times greater than the proposed public investment,” said Eric Fuller, owner of a Vancouver-based commercial real estate firm and chair of the CREDC.

The stadium would be publicly owned but privately maintained by the owners of the baseball team. The Clark County Board of Commissioners will take up the discussion about the tax again at an Aug. 24 work session. For the stadium to be ready for the 2012 season, construction would need to begin by November of this year.

To find out more about the CREDC report, .

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