Industrial real estate continued to hum along in 2021, with fewer vacancies, active leasing and growing rents, Kidder Mathews reported.

In the Portland area, industrial space continued to enjoy strong demand as retailers responded to consumer demand for shipping. Developers, meanwhile, pushed ahead with real estate plays north and south of Portland.

“Industrial has been sort of that one product type that’s been most resilient and has seen the most growth,” said Chris Nelson, principal of Capstone Partners, a Portland-based developer.

Asking lease rates grew 4.4 percent from $0.69 per square foot on a triple-net basis to $0.72 per square foot in 2021 compared to a year earlier, Kidder Mathews reported in a fourth-quarter update. Among other findings:

• Vacancies fell from 4.0 percent to 3.2 percent.
• Leasing activity jumped 15.6 percent from 9.9 million square feet in 2020 to 11.4 million square feet in 2021. The most active submarkets were Southeast Portland and the I-5 corridor with 35.8 million square feet and 29.4 million square feet leased, respectively.
• 6 million net square feet were absorbed – most of which occurred in the fourth quarter.
• Sales volume fell 24.2 percent from 10.4 million square feet in 2020 to 7.9 million square feet in 2021.
• Projects totaling 4.9 million square feet were under construction in the fourth quarter, while 1.8 million square feet were completed in 2021. The Bridgepoint I-5 development delivered 677,568 square feet to the Airport Way submarket, and Portside Industrial Park added 192,960 square feet to the Central Business District/West Vancouver submarket.

The industrial market has seen more mega-deals as users led by Amazon locked up space near cities. Specht Properties sold a parcel near Woodburn for $23.3 million in June. Amazon plans to build a five-story, 3.84-million-square-foot shipping warehouse on the Specht parcel and two neighboring parcels, for which it paid a total of $27 million, The Oregonian reported.

“What’s really pretty spectacular from a market perspective is how strong demand has been, particularly from large users,” Nelson said.

While Amazon gets the headlines, other retailers such as Walmart and Target have moved aggressively into e-commerce, buttressing demand for logistics facilities.

“What you’re seeing is that traditional retail businesses that would have distributed out of a warehouse to bricks and mortar – they’re all pursuing an omni-channel strategy,” Nelson said.

Capstone Partners is looking for a build-to-suit user for a potential 750,000-square-foot facility in Salem. “We’re hoping that will be a start (in 2022), but we’ll have to see,” Nelson said. “It depends on demand.”

Specht is building a 468,793-square-foot industrial building in Ridgefield, Washington, on speculation. (CEO Greg Specht could not be reached for comment). Completion is expected in August. Mackenzie is the architect and Perlo Construction is serving as general contractor.

“You’ve seen bigger sites and bigger development projects both north of Portland and down in Salem,” Nelson said. “(2022) in my opinion will be very much like ’21: another growth year.”

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A St. Louis-based real estate giant intends to build a 350,000-square-foot speculative industrial and logistics facility in the .

And while Commercial Realty Group (CRG) is eager to develop its 18.7 acres, officials believe greater growth is possible.

“We would take more (acres),” CRG Vice President Mike Wurtsbaugh said.

CRG has completed several Seattle developments. However, this is the first Portland-area investment for CRG, which is a subsidiary of Clayco – one of the largest integrated real estate, engineering, design-build and construction firms in the U.S.

The Troutdale Reynolds Industrial Park (TRIP) is north of Interstate 84 in Troutdale, and consists of 337 acres of land spread across 12 parcels owned by the Port of Portland. A large FedEx shipping distribution center already exists on TRIP property, and an 855,000-square-foot fulfillment center is now being built for Amazon. CRG plans to build its speculative industrial warehouse, called “The Cubes,” directly across Sundial Road from the FedEx facility. Site loading and other preparatory work is expected to begin almost immediately, according to the company.

“This investment is another example of TRIP’s evolution from a brownfield site into a thriving job center,” said Keith Leavitt, the Port of Portland’s chief commercial officer. “We expect this development to follow suit in attracting nationally known companies that will bring quality jobs to our region.”

CRG’s development is precisely what TRIP was intended to attract, Troutdale Community Development Director Chris Damgen said. Despite the speculative nature of The Cubes, Clayco’s track record of development nationally gives the city confidence, he said.

And when it comes to employment in east Multnomah County, Damgen added, the planned facility’s size makes it likely that only larger companies looking to fill jobs will be attracted to it.

“It’s certainly nice to have a company like Clayco have faith in the community and put up a major investment in hopes of finding a good tenant for that space,” he said.

CRG has been looking to break into the Portland market for several years, Wurtsbaugh said.

“We liked the dynamics of the Pacific Northwest, and it’s a key strategic market for us,” he said. “We tried for a few years to find opportunities here, and we’re fortunate to be able to acquire and develop the property from the Port of Portland. We’d like more of it.”

Normally, Clayco carries out an integrated development process from property acquisition through construction using an in-house team, Wurtsbaugh said. In this case, however, Seattle-based Sierra Construction was chosen to serve as general contractor.

“We typically design-build our own projects,” he said. “But with Sierra’s extensive experience in the local market and the tight construction market, we felt we’d better serve our capital and our clients by hiring Sierra in this instance.”

The Cubes will be a modern bulk distribution site with truck parking, 36-foot-clear building height, cross-dock capability, and plenty of trailer storage and vehicle parking. It is designed to accommodate up to four separate users.

CRG estimates the project could bring up to 300 new jobs to Troutdale when it is completed in summer 2019.

Troutdale is an ideal Portland-metro location for The Cubes, Wurtsbaugh said.

“It’s a strong logistics location,” he said. “You can hit I-5 fairly quickly by avoiding the downtown area, so those logistics companies are looking for that efficient flow of product. And with neighbors like FedEx and Amazon, it’s a proven logistics area. There’s a lot of confidence from users.”

Site work will start immediately with pre-loading work taking place to solidify the on-site soil. Project completion is tentatively scheduled by September 2019.

From Superfund site to distribution hub

The Troutdale property targeted for The Cubes has a long history. The industrial park formerly held an 80-acre Alcoa aluminum smelter plant that was constructed during World War II. The plant was later purchased by the Reynolds Metals Company, and operated under that banner for more than 40 years.

According to the Port of Portland and an Environmental Protection Agency report, the smelter property was in 1994 following an EPA investigation that found extensive groundwater and soil contamination caused by fluoride, cyanide, polychlorinated biphenyls (PCBs) and other substances.

The plant closed permanently in 2000. More than 100 plant buildings were then demolished between 2003 and 2006, when the cleanup effort was finally completed.

The Port of Portland purchased the 337-acre industrial park in 2007 after it was annexed into the city of Troutdale.

To date, the Port of Portland and its partners have invested more than $130 million into the purchase and redevelopment of the site, which includes a 90-acre wetland mitigation area. Revitalization was rapid, considering the amount of on-site pollution, Troutdale Community Development Director Chris Damgen said.
“The Port of Portland did the heavy lifting,” he said. “It’s very rare that a Superfund property with environmental constraints on it can get turned around so quickly.”

Now the property is starting to look like the thriving industrial hub envisioned by planners a decade ago.

“We’re certainly happy to see property that one day will be on the tax records,” Damgen said. “It certainly beats a rusty, old aluminum plant.”

Meanwhile, CRG Vice President Mike Wurtsbaugh said CRG and Clayco are looking to build more than only The Cubes.

“In the Pacific Northwest, opportunities are less frequent and competition is very strong,” he said. “And the ability to develop in Portland takes years to acquire a presence, if you might call it that. It’s been part of our long-term strategy and we hope to do more.” – Josh Kulla

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A Gresham industrial property has been purchased by a food distributor for a build-to-suit warehouse.

Preliminary plans call for constructing an approximately 135,000-square-foot facility on a 12.6-acre site at the Portland Portal Distribution Center in Gresham.

Panattoni Development agreed to sell the property in a fee development arrangement, according to a CBRE news release. Delivery is expected in early fall 2018.

Panattoni was represented by CBRE Vice President Andy Kangas. The buyer, whose identity was not disclosed, was represented by Rod Brokenshire and Stu Peterson of Macadam Forbes. Terms of the deal were not disclosed.

Located at Northeast 172nd Avenue and Sandy Boulevard, Portland Portal Distribution Center offers access to Interstate 84 and benefits from enterprise zone tax incentives.

Panattoni previously developed speculatively the Big Eddy Commerce Center at Northeast Riverside Parkway. Anixter, a distributor of communications and security products, recently leased 80 percent of the 153,000-square-foot industrial development.

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An industrial campus in Tualatin has sold for $26.5 million.

The three-building campus is fully leased by Nortek Air Solutions. The company uses the 329,474-square-foot space as its headquarters and manufacturing facility.

The seller was Huntair Properties, a limited liability company. The buyer was an affiliate of Meriwether Partners.

The 25.14-acre property is located at 19855-19866 S.W. 124th Ave. in Tualatin, close to Oregon Route 99 West and the junction of interstates 5 and 205.

Cushman & Wakefield brokers Jim Lewis, Gary Griff and Aaron Watt represented the buyer in the transaction. Stu Peterson and Rhys Conrad of Macadam Forbes represented the seller.

“This is a prime example of a buyer looking outside of the traditional real-estate boxes in search of higher yields,” Lewis stated in a news release. “This campus represented a high-quality and highly functional asset in an excellent Tualatin location occupied by a strong tenant – all desirable attributes for an investor.”

Lewis stated it’s become more challenging for buyers to find good assets at reasonable prices.

“Buyers are beginning to look at more unique opportunities that have potential to provide higher returns,” he stated. “In this case it was a manufacturing campus instead of a more traditional big-box distribution warehouse.”

According to Cushman & Wakefield’s report for the third quarter of 2017, Portland’s industrial market remains healthy, with 3.5 percent overall vacancy. Net absorption in the third quarter was 870,000 square feet.

The Tualatin submarket ranked among the strongest growth areas in the region, the brokerage firm reported.

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Amazon, one of the nation’s largest companies, is increasingly making its presence felt in the Portland area with a major industrial footprint and intriguing moves in the office and retail markets.

The company has firmly planted its flag in Oregon’s largest city, and Portland is among the hopeful applicants to host Amazon’s massive second headquarters.

What was once merely a book-selling website located in Seattle is now increasingly a physical force in local economies throughout the nation. And in Portland, Amazon’s dizzying pace of development has sent shockwaves through the industrial market, where it’s far outpacing any other client.

The company is surrounding the Portland-metro area with massive distribution facilities. Consider:

Amazon last year opened a 303,000-square-foot sortation center at Hillsboro’s Majestic Brookwood Business Park.

Last month, Amazon announced it would build a 1 million-square-foot facility on a Port of Portland parcel on North Lombard Street, with Trammell Crow Co. as developer.

In Troutdale, Amazon is building an 855,000-square-foot fulfillment center, also with Trammell Crow.

And in Salem, Capstone Partners is the developer of a 1 million-square-foot facility where Amazon will distribute large items such as gardening tools and pet food.

Individually, these large projects are a boon to the developers, contractors and subcontractors who all benefit from the retailer’s local growth spurt. Collectively, they indicate Amazon will be a major force in Oregon’s 21st-century economy, employing thousands of workers, spurring development and changing how consumers shop.

Amazon’s wave of industrial development is coming amid a constrained supply of industrial land. Much of the Portland area’s industrial land is spoken for, and Oregon’s urban growth boundaries make expansion difficult.

In comes Amazon with more than 3 million square feet of industrial development in the past two years.

“Amazon clearly is a major player in the market and is affecting the supply side,” Specht Development CEO Greg Specht said.

Amazon’s logistical strategy is designed to get packages to customers in hours, rather than days, said Tom Forte, a senior research analyst for D.A. Davidson. Amazon is gradually adding to its Prime Now service across the country.

Forte noted that Prime Now is available in New York City, where’s he’s based, but not at Stanford, where he’s currently working. Forte predicted Prime Now will spread first to major metropolitan areas, and then nearby suburbs.

“They’ll add that capability over time,” he said.

Amazon offers Prime Now in Portland, with two-hour delivery of Amazon products, groceries and local restaurant takeout. The new fulfillment centers will help Amazon promptly deliver a range of products, Forte said.

Amazon’s fulfillment centers are an important part of its Prime service, spokeswoman Ashley Robinson stated in an email message.

“There are a lot of contributing factors that go into our thought process on where to place a new fulfillment center,” she stated. “Most importantly, we want to make sure a fulfillment center is placed as close to the customer as possible to ensure we can offer a great Prime service and fast shipping speeds to customers. We also look at the workforce and we’ve found great talent in abundance in both the Salem and Portland communities.”

In some ways, Amazon is mimicking and furthering the logistics of Walmart Inc., which was known to build warehouses and retail stores in clusters.

Amazon’s strategy in recent years has been to “build first, buy second,” Forte said. In Portland, the company has done both.

Amazon bought into Portland with Elemental Technologies. Now AWS Elemental, the company was acquired by Amazon and tucked into its profitable Web Services division. Elemental has its office in the former Oregonian building at 1320 S.W. Broadway.

Amazon is rumored to be seeking additional office space in Portland. Some brokers have suggested Broadway Tower, a building now under construction that will offer 175,000 square feet of office space, would be a natural fit. The office space is represented by Kidder Mathews.

The office space at Broadway Tower is approximately 50 percent leased, said Kevin Joshi, senior vice president at Kidder Mathews. He could not disclose the tenants, he said.

Joshi said he expects the office space to be more than 90 percent occupied when Broadway Tower opens in October 2018.

Amazon is well-known for its use of nondisclosure agreements for local firms it works with, and several of its local business partners did not respond to requests for comment.

Amazon has also dipped its toe into brick-and-mortar retail sales, with the Portland-metro area again in the forefront. Amazon in 2016 chose Washington Square in Tigard for the third location of its brick-and-mortar bookstore.

Amazon recently opened a delivery center in south downtown to speed shipping to Prime customers.

Amazon also expanded its presence in Portland with its acquisition of Whole Foods. The grocery chain has eight Portland-area locations, and another in Vancouver, Washington. Amazon announced in June it would acquire Whole Foods for approximately $13.7 billion and integrate the grocer into Amazon Prime.

Portland was one of 238 cities to submit a proposal for Amazon’s second corporate headquarters by the Oct. 19 deadline. Greater Portland Inc. is leading the effort to woo Amazon. The centerpiece of Portland’s pitch is the soon-to-be-vacant U.S. Postal Service property.

Yet Amazon’s needs may exceed the space available in Portland. Amazon says it wants a second headquarters equal to its base in Seattle, where the retailer has an astonishing 8.1 million square feet, spread across 33 buildings.

In total, the Portland-metro area has only 27.2 million square feet of Class A office space, with a 9.1 percent vacancy rate, according to a Jones Lang LaSalle report.

Robinson declined to comment on the HQ2 process beyond Amazon’s issued materials.

Portland’s Broadway Corridor master plan, a guiding document for development of the Postal Service site and surrounding blocks, calls for building only 582,237 square feet of office space as part of 3.8 million square feet of total development. That’s smaller than one lease Amazon confirmed in downtown Seattle earlier this month, with the company reportedly taking 722,000 square feet in Rainier Square, a skyscraper now being built.

Amazon expects to spend up to $5 billion in construction for the second headquarters, which could eventually be used by up to 50,000 employees. For Portland, that raises the question of where the employees would be housed in the metro area’s already-tight housing market. Portland had fewer than 6,000 active single-family home listings in September, according to the Regional Multiple Listing Service (RMLS).

Geographic proximity will be a major factor in Portland’s bid, for good or ill. That hasn’t stopped even cities in Washington and British Columbia from trying.

Portland will point to its burgeoning tech scene and cheaper labor pool as selling points.

“They’ve been so successful in Seattle, it’s driven up the cost of talent,” Forte said. “Now they either need to diversify or spread out.”

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Portland may be about to see what the next generation of marijuana facilities looks like.

A group of entrepreneurs is proposing to build an indoor and outdoor marijuana growing facility, a retail storefront, a research and development building and a bed-and-breakfast on what is now a 3-acre auto-wrecking yard in North Portland.

“The idea out there that the business owners have is to create more of a lifestyle center for cannabis,” said Rahim Abbasi, an Abbasi Design Works principal who is designing the project.

The project, Saints Cloud, is designed for cannabis users to lounge, take classes on marijuana-related topics and even exercise. Several yoga studios already combine vinyasa and cannabis.

Visitors could watch marijuana being grown in the cultivation facility through a window in the retail shop to showcase the plants. They could then take a class on growing their own before staying overnight on the property.

“They’re thinking the McMenamins of the cannabis industry,” Abbasi said, referring to the pioneering Portland-based chain of brewpubs, restaurants and hotels.

Abbasi has requested an early assistance meeting with Bureau of Development Services staff to hash out some issues such as limits on retail space in the heavy industrial zone.

Saints Cloud is part of a boom in marijuana cultivation that is beginning to affect the industrial market in the Portland area.

Marijuana growers are in many cases competing with other industrial users for older, cheaper warehouse properties. Cannabis business owners have avoided newly constructed industrial properties because of their higher price and the difficulty of securing a loan because of their association with marijuana.

Another proposal was submitted in February for an indoor growing facility at 7916 S.E. Foster Road. The proposal came from 6D LLC, an entity registered to a Damascus address. The Foster Road parcel is occupied by a 50,000-square-foot retail building.

“A lot of the marijuana growers are swooping up the older, cheaper industrial product and they’re kind of pricing out these sole proprietors who might be running a different type of business,” said Brian Mitchell, a broker at Macadam Forbes.

Financing is another obstacle for marijuana growing facilities.

“They obviously have to pay cash if they’re buying it,” Mitchell said. “You can’t have a loan on a building or the bank will call the note due because it’s federally illegal.”

Saints Cloud’s Jesce Horton, one of three partners in the venture, said they’d had a tough time finding an appropriate property in the city.

“We’ve been searching for quite a while to find somewhere to cultivate,” Horton said. “Ultimately, an old attorney friend reached out and said there was an owner who was interested in selling.”

The property, at 1040 N. Commercial Ave., is currently Rose City Auto Wrecking. Raoul Calderon of West Linn is listed as the property owner in city records. The Saints Cloud team has an agreement in principle to purchase the property, Abbasi said.

The three partners have one major investor and are seeking to raise more money for the project, Horton said.

The partners want to allow customers to use marijuana on the property.

“There are not very many places where consumption is allowed, so hopefully we’ll be able to develop a property where that won’t be a problem,” Horton said.

The property is adjacent to railroad tracks and 14-acre Farragut Park. If the property is developed as envisioned, guests will have views of the park in their eyes and the scent of cookies in their nostrils.

“There’s a Nabisco factory right across the street that has the whole area smelling like cookies every day,” Horton said.

Saints Cloud targets recreational marijuana users. The development would be phased, with the cultivation facilities in place first. A greenhouse would be erected along with the warehouse.

The property tells a story of industrial Portland. It appears to have once been a cattle barn, Abbasi said, before the auto-wrecking yard took over. Cattle were likely transported on the adjacent railroad tracks. Soon, perhaps, it will be a marijuana-themed resort.

Horton is no stranger to the cannabis business. He’s part-owner of Panacea Valley Gardens, a marijuana grow facility in the Columbia River Gorge; and a Portland dispensary, Panacea, at 6714 N.E. Sandy Blvd.

Horton is also chairman and co-founder of the Minority Cannabis Business Association, a nonprofit that seeks to lower barriers to entry in the industry.

Abbasi said he’s seen an increase in design work from the marijuana industry, but nothing like the Saints Cloud proposal.

“The whole goal in their minds was to be the first one to do something like this,” he said.

In many cases, Abbasi’s clients are new to property development and its many complications, such as seismic upgrades and sprinkler installations.

“It’s been an interesting environment to work on because a lot of these guys have no experience with development or building,” he said.

The regulatory environment means marijuana entrepreneurs are forced to be flexible, Abbasi said.

“Their operations are constantly changing because the rules are constantly changing in terms of what they can and can’t do,” he said.

Some rules, such as allowing businesses to operate without a certificate of occupancy as long as they’re working toward one, have eased, he said.

Yet the specter of marijuana’s federal status continues to loom over the burgeoning industry. U.S. Attorney General Jeff Sessions has been a vocal opponent of marijuana legalization, describing the drug as “slightly less awful” than heroin.

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When the U.S. Postal Service needed a large parcel of land so that it could vacate prime Portland real estate coveted for development, the search became a struggle.

“The main requirement was we needed north of 45 acres to fit the facility on,” said Bruce Wood, real estate and construction services manager for the Portland Development Commission. “There were very few 45-acre sites that were available. And when I say available, I mean shovel-ready.”

That is reflective of the booming industrial market here, along with limited available land. The vacancy rate for industrial space in Portland fell to its lowest level ever in the first quarter of 2016 – 3.6 percent, according to Jones Lang LaSalle. Meanwhile, rents are rising.

“The Portland industrial market is the tightest it has ever been in terms of vacancy,” said Tyler Sheils, vice president of industrial real estate at JLL.

“The strong demand from users coupled with limited industrial land sites is pushing development outside the traditional core industrial areas, and it’s going further north and south along Interstate 5, and east along I-84,” he added.

Approximately 2.5 million square feet of industrial space is under construction in Portland, and 50 percent is already preleased.

Competition is fierce for spaces bigger than 100,000 square feet.

“We’re very limited in large industrial parcels of land,” Sheils said. “For these larger occupiers, they need options in our market.”

Trammell Crow Co. and Clarion Partners are behind the largest current local industrial project – a 600,000-square-foot Subaru distribution facility at Gresham Vista Business Park, south of I-84. Trammell Crow will lease the property to the automaker. The auto-parts distribution facility is on 221 acres purchased by the Port of Portland in 2011.

The port and the city of Gresham boasted of the site’s size, access to I-84, favorable soils and “shovel-ready” status.

However, Steve Wells, senior managing director of Trammell Crow, said Portland is beginning to lose tenants to other cities where more land is available.

“In the past, I don’t think that was the case,” he said. “It was challenging to find a location that would work for Subaru, and I think it’s going to get more and more challenging.”

Trammell Crow lost a potential tenant that sought 260,000 square feet, Wells said. He declined to identify the company, which ended up in Seattle.

“We’re getting to the point where we’ll certainly lose people that would otherwise occupy here but can’t,” he said.

The lack of land is leading industrial developers to take second looks at some sites, Wells said. Before Trammell Crow could build its Colwood Industrial Park, the property had to be rezoned and wetlands had to be filled. Extra steps can be a turnoff for prospective tenants, who often want to move quickly.

Nevertheless, industrial demand is continuing apace and developers are busy.

Capstone Partners is developing phase II of its PDX Logistics Center near Portland International Airport. Construction of the 355,200-square-foot space is on track to finish next month, said Chris Nelson, co-founder of Capstone. UPS has signed on to lease about 240,000 square feet for a sorting facility. A second major industrial tenant will be announced soon, Nelson said.

Capstone plans to break ground in June on phase III, with delivery scheduled for August 2017.

Phase I, completed in 2014, is a 491,200-square-foot facility that attracted KeHE Distributors, a large natural foods distributor whose clients include Albertsons and New Seasons. KeHE took the larger, 380,000-square-foot building. Ernest Packaging Solutions occupies the smaller building.

“We’re seeing good growth in the infrastructure that supports the distribution of packages in the market,” Nelson said.

Much of the growth in industrial properties is a reflection of population increases, he added.

“Growth in the general economy is fundamentally driving most of it,” he said.

Rent for industrial space averaged $0.53 per square foot in the first quarter, according to JLL. That was a 4 percent increase from the previous quarter.

The Postal Service’s Colwood property purchase has reverberated through the market by removing a large parcel from Portland’s inventory.

“The effect on the general industrial property market is noticeable,” JLL stated in an April report.

As a result, developers are more willing to build speculative projects. They made up 61.5 percent of the market in the first quarter, JLL said.

The Postal Service had a number of unique challenges, Wood said. One was high standards for soils. Another was local tax revenue.

“It was very important for the (Postal Service) to feel welcome, given it’s a federal facility that doesn’t pay taxes,” he said.

The agency considered a site in Troutdale, but the city “wanted a large payment in lieu of taxes being deferred,” Wood said, noting that the Colwood site was chosen in large part because of its proximity to Portland International Airport.

Industry observers said larger parcels are in particularly high demand.

“It’s harder to find the ‘A’ location sites,” Nelson said. “For the larger users, they’re having to go to more secondary locations. That’s not to say they’re bad; they’re just not quite as central.”

Portland is a center for industrial development, driven by population and easy transportation access thanks to north-south and east-west interstates, Portland International Airport and the ports of Portland and Vancouver, Wash.

Other projects are under construction.

• Specht Properties Inc. of Portland is building 800,000 square feet at Portside Industrial Park in Vancouver as a speculation. The first phase, 257,609 square feet, is expected to be delivered late this year, according to JLL.

• Specht also is building a 50,400-square-foot facility for Comcast in the Colwood area. The Comcast fulfillment facility is about 50 percent office space. And Specht owns 107 acres planned for development near I-5 in Woodburn. A Specht executive could not be reached for comment.

• In Clackamas, Industrial Property Trust is building the Clackamas Distribution Center, a 190,600-square-foot facility. The distribution center is 100 percent preleased, according to JLL.

• PacTrust is building several structures at the Koch Corporate Center in Tualatin. Building 1 is 201,300 square feet. Two smaller buildings are 45,000 and 60,000 square feet, respectively.

• At Majestic Brookwood Business Park in Hillsboro, the 303,360-square-foot Building 3 is scheduled for delivery this summer. The project is being developed by California’s Majestic Realty Co.

• Precision Construction is building in Hillsboro a 104,541-square-foot expansion for film company Laika.

Sheils said the extent of preleasing in the market is a strong indicator that sufficient pent-up demand exists to last at least through 2016.

“The question will be: Can new construction keep up with demand?” he said.

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