New data show a stable multifamily market in the Portland-metro area, with little change in rents or vacancy rates, while construction deliveries and investment sales fell.

The numbers indicate a market giving multifamily developers little reason to invest in new projects amid high interest rates.

Average asking rents in the Portland area slipped by 0.24 percent compared to a year ago to $1,656, according to a Kidder Mathews analysis of CoStar data. The numbers are from the second quarter — April through June. Rents rose 0.7 percent from $1,644 during the first quarter.

Vacancies improved to 7.1 percent, down from 7.2 percent a year ago and 7.4 percent in the first quarter of 2026, indicating a “relatively stable rental market,” Kidder Mathews stated.

Investment sale prices dropped 12.9 percent compared to a year earlier, to $182,489 per unit. Falling values reflected “continued repricing in the investment market,” Kidder Mathews stated.

Capitalization rates were unchanged at 6.4 percent, compared to the previous quarter.

The top transaction during the second quarter was the $63.3 million sale of Ladd Tower in the South Park Blocks by Invesco to buyers Guardian and PCCP. The 332-unit property fetched $190,663 per unit.

Construction deliveries fell 24.8 percent compared to a year earlier, with only 1,813 units arriving during the quarter. The largest completed project was at the Vancouver Waterfront, where Lincoln Property‘s 440 West added 198 units to the market.

The largest multifamily development under construction is the 369-unit project in Beaverton’s Cedar Hills neighborhood from High Street Residential, SCOA Real Estate Partners and Lease Crutcher Lewis.

Absorption remained positive at 2,604 units during the first half of the year.

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Barg Singer Hoesly is expanding into a new office in downtown Portland.

The real estate law firm has inked a lease for approximately 3,300 square feet in the 1000 Broadway Building, said Jonathan Singer, a partner at the firm.

“It’s a great location,” he said. “It’s not the newest downtown office, but they’ve done a good job of refreshing it.”

The 24-story office building, which was completed in 1992, is owned by members of the Moyer family and managed by NAI Elliott. It was the first tower developed by Tom Moyer, who later built Fox Tower and Park Avenue West before he died in 2014.

Barg Singer Hoesly outgrew its current space at 121 S.W. Morrison St., Singer said. The firm has long subleased from another law firm — Farleigh Wada Witt.

“It’s been a great relationship over that period of time,” Singer said. “We’re just too big for the space at this point.”

The five-lawyer firm has historically focused on real-estate transaction work, but now also boasts a commercial litigation team.

Tenants largely have their pick of office space in today’s market, with vacancy rates remaining near record highs. During the first quarter of 2026, the Portland market’s direct vacancy rate was 15.2 percent, according to Kidder Mathews.

Barg Singer Hoesly chose a move-in ready space instead of pursuing costly tenant improvements.

“It is a good time to be a tenant, but it’s got to be the right space because the cost of building out is so expensive,” Singer said. “Construction costs are so high that it made this space a really perfect fit, because it was already built out for a law firm of approximately our size.”

NAI Elliott is in the midst of a multiyear renovation of the 1000 Broadway Building. Elevators are being replaced and the lobby is being refreshed.

Law firms and other professional service providers have continued to buttress downtown office tenancy as tech firms and others downsize their office footprints. Law firms have led the way in signing leases for some of Portland’s newest, and likely priciest, office space in buildings such as the Block 216 Ritz-Carlton tower and Eleven West.

“Law firms writ large have found that they are much busier in this economy,” Singer said. “Also, if you’re going to draw the top talent, you really need to have office space that inspires people to come in.”

Law firms value collaboration and mentorship, which are better done in person, Singer said.

Barg Singer Hoesly will move into the 1000 Broadway Building on June 18. The lease term is slightly shorter than six years, Singer said. He declined to reveal the lease rate, citing an agreement with the landlord.

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Vacancies in Portland-area office space reached a record-high 15.1 percent during the second quarter of the year, Kidder Mathews stated in a new report.

It was the 11th consecutive quarter of rising vacancies in the Portland market, and the first time that vacancies crested 14 percent.

Leasing activity has slowed just as dramatically, Kidder Mathews reported. It fell nearly 43 percent to 635,000 square feet during the April-to-June period, compared to a year earlier, reaching a record low for the second quarter.

The only period of lower lease volume came in July through September 2020, during the heart of the COVID-19 pandemic.

“It’s pretty dreary,” said Gary Baragona, Kidder Mathews vice president for research, based in San Francisco.

“There’s still some work to do before that market starts to recover,” he said.

The plunge in office values has brought out bargain hunters. Investment activity grew 22 percent in the first half of 2025 compared to a year earlier, Kidder Mathews reported.

“Although institutional buyers have historically made up over 30 percent of the trades, private buyers and owner-users have accounted for over 90 percent of the transaction volume in the past year,” Kidder Mathews stated.

That fits with recent transactions such as the $45 million sale of the U.S. Bancorp Tower to auto dealer Jeff Swickard by Unico Properties, and the $33 million sale of Montgomery Park to Portland-based family investor Menashe Properties.

Asking rents grew to $29.64 per square foot, Kidder Mathews reported.

Many office users have downsized their space as employees’ hybrid work arrangements mean companies use less space. The average lease size is less than 3,000 square feet — approximately 5 percent below the 10-year average, Kidder Mathews reported.

“That illustrates that companies are trying to right-size their space,” Baragona said.

Large leases have become rare in recent quarters, and that trend is expected to continue, the brokerage reported.

Bucking the trend, some newer properties in Portland such as Block 216 and Eleven West have managed to attract tenants — primarily professional services firms. Architecture firm Populous recently agreed to lease a floor above the Bamboo Sushi restaurant at 404 S.W. 12th Ave., and leave a smaller space in the Central Eastside.

Suburban office space has outperformed urban offerings, but even suburban activity has slowed, Baragona said.

“The optimist in me says the cities that figure out how to reinvest in their urban cores are going to be the ones in front of that recovery cycle,” Baragona said, pointing to encouraging signs in San Francisco and Seattle.

“Portland has a little further to go,” he said. “Portland’s a market where we have yet to see much of a rebound in activity.”

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A major brokerage firm said Thursday that Portland’s office market is “poised for a soft landing.”

Jones Lang LaSalle said in its third-quarter report that net absorption was only slightly negative, to the tune of a “negligible” 66,000 square feet.

Rents in the urban core slipped 0.7 percent to $39.03 per square foot on average, while vacancies grew slightly to 30.7 percent.

Office tenants are still trying to find their footing, JLL said.

“Many tenants remain quite unclear on how they want to configure their space because they are still waiting for office attendance to settle into some sort of predictable pattern with hybrid work,” JLL’s report stated.

Some firms are adding space after initially downsizing. Law firm Miller Nash added 6,300 square feet only six months after relocating to Eleven West, Downtown Development Group’s newly opened West End tower.

Meanwhile, Davis Wright Tremaine added nearly 5,000 square feet within six months of relocating to Block 216, JLL said.

“We are seeing more activity in the (Central Business District),” said Patricia Raicht, JLL’s national director for research for the Western U.S. and Latin America.

Companies are increasing their expectations for in-office attendance, Raicht said. At the same time, many are finding the idea of shared desks wanting. Employees “are wanting dedicated space, and you need more space for that,” she said.

Major employers, including Nike and Amazon, have recently announced stepped-up office attendance policies.

Some employers are taking advantage of the downturn in office prices to buy their own. Oregon Health and Science University purchased buildings in the South Waterfront, Directors Mortgage bought buildings on Kruse Way in Lake Oswego and the Native American Rehabilitation Association of the Northwest snapped up the former Portland Opera headquarters in Southeast Portland.

“We are seeing more of that,” Raicht said. “Now is a great time to buy an office building.”

Kidder Mathews‘ third-quarter report, released last week, showed similar trends. Sales volume grew 99.5 percent, compared to a year ago, to 1.8 million square feet. Rental rates fell and direct vacancy climbed to a record 13.6 percent.

U.S. Bank announced last month it would not renew its lease at the U.S. Bancorp Tower, or Big Pink. Employees will move to the bank’s office in Gresham and other locations in the Portland area, the company said.

Still others have recently taken space. Shoemaker Hoka expanded into office space in Goose Hollow early this year. In August, eBay renewed its lease on 56,645 square feet downtown.

The office market continues to be bifurcated, with attractive newer properties leasing well at the expense of older Class-B and Class-C space, analysts said.

More space is likely to come on the market as leases end and tenants downsize, brokers said.

Longtime Portland office broker Doug Bean said “shadow space” that companies are leasing but not fully using will add to vacancies.

“When those leases roll, the square footages will be reduced, and that’ll further exacerbate the vacancy rate,” Bean said. “But I’m an optimistic guy. I think the market’s getting better and people are getting back to work (in offices).”

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Fox Meadows Apartments, a 95-unit garden-style complex in Tualatin, has sold for $19.35 million. Kidder Mathews represented the seller, Trion Properties. The buyer was a national multifamily investor based in California.

The property was constructed in 1958, according to Zillow. It has one-bedroom, two-bedroom and three-bedroom units.

Located at 19545 and 19605 S.W. Boones Ferry Road, Fox Meadows is within a short distance of popular dining and shopping destinations, including Bridgeport Village. The property offers convenient access to major thoroughfares that connect to all parts of the Portland-metro area.

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A 64-unit apartment complex in Gresham has sold for $19.5 million, pointing to strong market fundamentals for suburban multifamily properties.

The seller, Trion Properties, touted the March sale of Edison Apartments, which the investment firm originally acquired for $12 million in October 2020, when the property was newly built.

“We ultimately leveraged the strength of the property, the location and the increasing demand for suburban life to lease up the asset and generate a significant return within just 18 months,” Trion Properties Managing Partner Max Sharkansky stated in a news release.

Trion Properties is based in West Hollywood, California, and Miami.

The buyer was RM Edison, a limited liability company. The entity is connected to RealtyMogul, a Los Angeles-based investment platform.

The sale equates to $304,688 per unit. RealtyMogul on its website stated it is targeting a 13.2 percent return on Edison Apartments in a 10-year investment period.

Edison Apartments, at 1833 S.E. Sixth St., was completed in 2020. It features mostly two-bedroom, two-bathroom units.

Gresham has a tight rental market amid strong job growth, according to Sharkansky.

“With the ongoing boom of industrial asset classes, Gresham is well positioned to continue to benefit from economic expansion tied to the rise of the e-commerce industry,” he stated. “The continued expansion has led to an increased need for quality housing to support the growing population of employees. Despite the increasing population, new construction has been limited as developers have focused on Portland’s core during the economic expansion. The result has been a submarket with some of the tightest vacancy rates and fastest rising rents in the state.”

Jordan Carter, Tyler Linn and Clay Newton of Kidder Mathews represented Trion Properties in the transaction.

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Portland’s office market is sending mixed signals as it recovers from the worst of the pandemic while a new reality sets in with fewer workers going into offices.

The vacancy rate continued to climb early this year, reaching 19.3 percent in the metro area, according to JLL‘s first quarter report. Asking rents fell to $33.75 per square foot.

The urban core showed signs of life, however. Among large-scale leases of 10,000 square feet or more, 78 percent of first-quarter deals occurred in Portland’s central business district.

First-quarter data comes as tenants struggle to discern their future needs for office space.

“With a lot of companies coming back to the office, they’re reassessing their space needs,” said Tim Harrison, JLL’s Pacific Northwest research director. “A lot of companies are moving to a hybrid model, and they’re reconsidering how much space they need.”

Insurance company Moda Health recently renewed its lease of more than 100,000 square feet at Moda Tower in downtown Portland, casting a vote of confidence in the area’s future. The lease length and other terms were not disclosed. Moda Tower is now 83 percent occupied, according to building owner Unico Properties.

The tower was completed in 1999, when Moda Health was known as ODS Health.

“The signal then was the same as this signal we send today,” Dave Evans, Moda Health’s chief financial officer, stated in a news release. “We are committed to downtown, to this city and to this community.” (Unico Properties and American Realty Advisors acquired Moda Tower in 2018 and leased back space to Moda Health. A $6 million remodel followed in 2021).

Office brokers and analysts are watching for moves by major office users. Legacy Health is evaluating its office space needs and crafting a strategic plan for remote work. The health care network owns its headquarters, an 86,450-square-foot building in Northwest Portland.

Legacy Health had no moves to announce, spokeswoman Elizabeth Baker said.

“Obviously, like all companies, we’re evaluating the situation and our options,” she said.

Some companies that downsized earlier in the pandemic may be looking for more space soon, Harrison said.

“I think a lot more people are going to come back to the office on a regular schedule, and I think a lot more companies are going to realize they need more space than they have, or what they’ve rightsized down to,” he said.

Employment trends are positive; the Portland area‘s labor force grew by 56,000 employees compared to a year ago.

“What we’ve also seen is a lot of companies doing a lot of hiring,” Harrison said. “Companies are quickly seeing they need more space than they have for their employees.”

JLL’s report identified “growth on the horizon” for the central business district, with several large leases contributing to much-needed office space absorption. Still, downtown has a ways to go, Harrison said.

“It was really hard-hit,” he said. “Do I think that the market recovers overnight? No, I don’t. It will take multiple years – when I say multiple years, I think it takes five years, maybe more, before the market recovers to the place it was pre-pandemic. But we’ll get there.”

It will help when city and county employees return to downtown Portland, he said.

Kidder Mathews, in its own first-quarter report, likewise saw positive trends.

“We can expect movement across the metro to gradually improve in 2022 as companies hire at rapid pace and tenants begin to finalize back-to-office procedure,” the brokerage stated.

In the metro area, 419,762 square feet of office space was under construction during the first quarter, according to JLL.

Subleasing activity has jumped. Navex Global returned 45,000 square feet in the Kruse Way submarket during the first quarter. The asking rent is 11 percent below the average for the area, according to JLL, providing some needed affordable office space in the increasingly expensive Lake Oswego office market.

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Portland-area office vacancies rose to 11.2 percent in the fourth quarter of 2021 as the COVID-19 pandemic continued to dampen demand, according to a new Kidder Mathews report.

Lease rates remained stable as landlords offered concessions to maintain pricing. Average lease rates held steady at $28 per square foot for full-service office space.

Kidder Mathews’ report released last week adds to concerns that Portland is falling behind other western cities where the office market has rebounded faster.

“I wish it was coming back faster than it has been,” said Jonathan Barach, president of Vista Investment Group, a Santa Monica, California-based firm that owns several Portland-area properties. “There certainly were some other markets that we’re invested in where they have come back, and even surpassed, where they were before the pandemic.”

Denver and Austin, Texas, are among the markets outperforming Portland, Barach said.

“They were minimally impacted and seem to be doing fine,” he said.

Menashe Properties, a major Portland office owner with investments in other cities, has seen similar trends in its portfolio, CEO Jordan Menashe said.

A 400,000-square-foot property the Menashe family firm owns in Dallas “had more positive absorption than our entire Portland core combined,” he said.

Meanwhile, leasing activity in Portland has been very slow. Total new leasing fell to 646,511 square feet, including 212,622 square feet of Class-A office space, Kidder Mathews reported.

“There are no deals right now,” Menashe said. “There’s no momentum.”

Menashe said Portland is stuck in a rut of its own making.

“It’s not the weather,” he said. “It’s probably not even the streets that have homeless people on them. It’s the attitude. We need to get out of our own way.”

During the fourth quarter, office sales volume fell, with transactions averaging $241.83 per square foot. Capitalization rates settled at 6 percent.

Office projects totaling 812,775 square feet are under construction, including 269,908 square feet at 503 on Tenth in Southeast Portland and 169,188 square feet at Block 216 downtown, Kidder Mathews reported.

The stop-start nature of the pandemic has led landlords to wonder when the office market will recover fully. Many employers were planning to welcome employees back to offices this month before the omicron strain led to a spike in COVID-19 cases.

“As local businesses reopen and the state continues to rebound from the effects of the pandemic, the new omicron variant may hinder a more robust recovery,” Kidder Mathews’ report stated. “Yet, there is strong optimism that current demographics and consumer spending will drive the Portland economy forward within the next 12-24 months.”

Suburban markets with strong mixed-use products will continue to drive demand, the analysis predicted.

Among the empty office buildings has been Vista’s U.S. Custom House, the revamped historic building near Portland’s North Park Blocks that was vacated by WeWork in early 2021.

Barach said there may some good news coming for the 66,935-square-foot, full-block building: A lease is “out for signature” for a majority of the property. He declined to reveal the tenant before the lease is signed, but said it is a national operator.

The timing of a recovery is difficult to predict, Barach said.

“It’s hard to bifurcate what is wishful thinking with what is a more sober outlook,” he said. “By the end of this year, things will be more quote-unquote normal. And that might mean that people have just adjusted to living with this thing.”

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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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Albina Vision Trust will work with Edlen & Co. to develop in Lower Albina a seven-story building with 120 affordable housing units as well as an adjacent theater.

The residential building will serve families earning between 30 percent and 60 percent of area median income. The theater will serve artists and youths, and connect the North Portland neighborhood to its rich cultural heritage, Albina Vision Trust stated.

Albina Vision Trust, a community nonprofit, will own the building. Edlen & Co. – the recently rebranded successor to Gerding Edlen – will serve as developer.

Colas Construction, Lever Architecture and Kidder Mathews are project team members as well.

The property is located between North Flint and Wheeler avenues north of the Moda Center. It is owned by Betsy and Rich Reese, who have committed to the project’s mission and goals, Albina Vision Trust stated.

“The Albina Vision team is determined to lead the redevelopment of Lower Albina and the re-rooting of Black people, families and culture there,” stated Rukaiyah Adams, chairwoman of the trust’s board. “That work includes making sure that we are reflected in the built environment and that we participate in the wealth generated by our presence as owners of our homes and business. We aim to thrive, not just survive – and it begins with this project.”

Albina Vision Trust was founded to reverse the 20th-century displacement of Black families in the area for projects such as Interstate 5, the Rose Quarter and the expansion of Legacy Emanuel Medical Center.

“Recovery from the present-day consequences of forced displacement, the theft of Black wealth and the pandemic-induced economic downturn will require us to lead with our values,” stated Winta Yohannes, managing director of Albina Vision Trust. “This modest but significant action to prioritize the arts, create affordable housing and ensure community ownership is how we move from talking about equity to seeing it in action.”

Mark Edlen, co-founder of Edlen & Co., said the firm was approached by the property owners about two years ago; they sought a project with affordable housing and transit. The firm wants to be part of helping right past wrongs alongside Albina Vision Trust, Edlen said.

“We share that belief and that’s why we’re partnering with AVT,” he said.

The proposed project addresses two realities, Yohannes wrote in an email.

“There is no longer a single neighborhood in Portland considered affordable for the average African-American family and … creative organizations and artists also continue to be priced out of the city despite their importance to the fabric of our civic and economic identity,” she stated. “For these reasons, it was important that we anchor our first project and Lower Albina’s rebirth with housing and a theater, which recognizes both the rich cultural heritage of the district and our aspirations for its future as a thriving arts district.”

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