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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A New York City investment firm snapped up a Lake Oswego luxury apartment building this month for $66 million.

Sentinel Real Estate purchased the 158-unit Willow Apartments, in the Kruse Way area, in a transaction that values the 2-year-old development at $417,721 per unit — a high-end valuation for the Portland market.

The seller was an entity tied to the original developer, Shorenstein Properties of San Francisco. Deacon Construction built the project, which was designed by GBD Architects.

“Willow Apartments aligns with our strategy of acquiring high-quality rental communities situated in markets characterized by limited supply, strong population growth and positive economic fundamentals,” George Tietjen, Sentinel’s managing director, stated in a news release.

“Lake Oswego is considered one of the most affluent and supply-constrained submarkets in the greater Portland metropolitan area given its high household incomes, desirable schools and limited new multifamily development,” Tietjen added.

Willow Apartments offers units with one, two or three bedrooms, community amenities including a sky lounge, flexible dining and workspaces, private work pods, a fitness center with forest views, an open-air deck and a barbecue patio, covered parking spaces with electric-vehicle charging, multiple storage areas and a pet-grooming spa.

Willow Apartments sits on a 5.16-acre site at 5600 Meadows Road.

This property will “benefit from durable rental income and sustained market demand for upscale living spaces” in Lake Oswego, Tietjen stated.

JLL Capital Markets Senior Managing Director Ira Virden and Managing Director Carrie Kahn represented the seller.

Clackamas County recorded the transaction on July 10.

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Portland design commissioners are girding for battle as they begin to confront a push to suspend the city’s mandatory design review process for two years.

The procedure is advancing quickly, and city staff anticipate the City Council will consider legislation to suspend design review as soon as December.

The Portland Planning Commission will weigh a suspension of design review on Aug. 25 as a prelude to council action. Design commissioners said Thursday they plan to write letters and perhaps testify in person at that meeting.

The time has come for design commissioners to make their case, said Tim Heron, a senior city planner who works with the Design Commission.

“So, it’s go time,” he said after laying out the calendar during a brief Design Commission work session on Thursday.

Two bureau directors, Eric Engstrom of Planning and Sustainability and Eric Kutch of Permitting and Development, sent councilors Angelita Morillo and Eric Zimmerman a letter May 7 outlining a potential two-year suspension of design review. That was prompted by councilors ordering a report on design review this past December.

Design review has attracted criticism for adding delays and expense while elected officials — including Gov. Tina Kotek and Mayor Keith Wilson — have made housing production a priority, to little effect. Other cities, including Seattle, have suspended design review.

Policy efforts have shown little progress to date. In 2025, the city of Portland approved only 22 new construction permits for multifamily projects.

The proposed suspension would affect only mandatory design review. Developers still could opt in if they prefer design review to a standards-based approval process.

Several Permitting and Development staffers who work on design review would be reassigned and integrated into a Planning and Sustainability project team, according to the directors’ memo. The directors also requested additional funding for the staffing during the two-year period to make up for reduced design review revenue.

The two bureaus, prompted by the December directive from the City Council, published a joint report on design review in April. The 119-page report painted a picture of a broad economic pullback. “… Development activity has steadily declined and, in 2025, experienced an even more precipitous decline. This multiyear decline has not been limited to projects in the Design and Historic Resource Overlay Zones but has been reflected citywide for almost all types of housing and commercial development.”

Design review proponents say the process benefits projects, often making buildings better and giving the public a voice.

“Design review is a time when the public is able to come provide testimony,” Design Commission Chairwoman Chandra Robinson said in February. “It’s the time when they’re able to get their voices on the record, and I think it’s an important part of the process that they’re able to share their thoughts on proposals in their neighborhood.”

They also say design review unfairly takes flack when national and regional macroeconomic conditions — interest rates, development cycles, construction costs — matter far more. The April joint bureau report also cast blame on larger factors.

“Development within the city remains at historic lows due to various factors including high interest rates, high apartment vacancy combined with stagnating rents and an aversion by institutional capital to investing in Portland due to real and perceived safety, taxation, regulation and market factors,” the report states.

On Thursday, Robinson said she would draft a letter to the City Council, either on behalf of the Design Commission or individually.

Commissioner Joe Swank said the Design Commission may want to write a different type of letter than one with typical dry, technical language, as it’s fighting for its life.

“I agree with a different approach,” he said.

The Historic Landmarks Commission is also expected to weigh in with its own concerns.

Design commissioners are expected to consider their response during an Aug. 6 meeting before transmitting it to the Planning Commission and City Council.

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The first half of 2026 saw the completion of some major construction projects in Salem, as well as the start of several more.

Workers are continuing to build the six-story Citizen Apartments in downtown and the Kuebler Village commercial development near Costco.

Meanwhile, efforts to revive the ex-Rite Aid building, the former JCPenney department store and the empty lot dubbed “The Pit” are showing signs of progress.

Here’s an update on some key projects.

Citizen Apartments joins downtown skyline

Originally the site of Salem City Hall and then a parking lot, the property at 277 High St. N.E. is gaining a six-story, 105-unit apartment building.

Deacon Development, which delivered the Rivenwood Apartments nearby in 2024, has dubbed this $25 million project Citizen Apartments as a nod to its storied history as the heart of Salem government.

Crews broke ground this past October and are scheduled to finish in early spring 2027.

The 78,855-square-foot building will include 16 affordable housing units as part of the city’s Multiple-Unit Housing Tax Incentive Program.

Amenities will include a coffee bar, a mail room with parcel lockers, a fitness center, secure bike storage, a pet wash station, electric vehicle parking and charging, a co-working lounge with a private work pod, a community room equipped with a kitchen, games, a semi-private theater room, and a roof terrace with a grill and city views.

Company submits proposal for ‘The Pit’

A fenced hole in the ground remains after a bank building was razed in 2017, leaving what is commonly known as “The Pit” at the southeast corner of Liberty and Chemeketa streets.

Deacon Development initially also purchased this land next to the Citizen Apartments site but sold it after determining the conditions placed on it by the city would make development financially infeasible.

The property was reacquired by the previous owner, West Linn-based FT LLC, which also owns the adjoining building used by Pacific Office Automation. Company officials said they want to build a surface parking lot to serve the adjacent building, but that is not permitted under the city zoning code.

FT LLC has submitted a land use application, and it remains under city review. It’s the first official redevelopment proposal since the bank building was demolished.

Mexican grocery store to open in downtown

A long-awaited downtown grocery store is due to arrive in September, ending a yearslong vacancy in a former Rite Aid building.

El Torito Supermarket will open at 435 Liberty St. N.E.

Husband and wife Alfredo Mendez and Lily Perez opened the original El Torito Meat Market on Lancaster Drive about 20 years ago. Their stores have a meat counter, a produce section, a bakery, a hot deli, and grocery items.

The Rite Aid on Liberty Street closed in December 2023 following the company’s bankruptcy.

Salem’s Urban Renewal Agency Board voted in May to allocate $470,000 from the Riverfront Downtown Urban Renewal Agency capital improvement grant program for the supermarket.

According to city documents, the store is expected to provide 30 new jobs.

New tenants on the horizon to fill space

When the planned purchase of the former JCPenney building fell through in October 2025, it remained under the ownership of Penny Building, a company tied to developer Stuart Lindquist.

The 100,000-square-foot building has been vacant since JCPenney exited in 2020.

Lindquist confirmed in April that a furniture retailer would lease an 11,070-square-foot spot on the first floor. He said his company wants to fill the empty space with street-facing businesses that complement the area and cater to the increase in foot traffic brought by new apartment complexes in downtown.

“A single-tenant department store is being converted into a multi-tenant building in response to Salem’s demand for smaller office and retail spaces,” developers stated in their land use application submitted to the city.

A site plan approved by the city in May calls for a 5,000-square-foot jiujitsu gym on the first floor, along with separate retail spaces in the basement and the first and second floors.

Cannery transformation gains traction

A new developer is stepping up to helm the $150 million transformation of the former home of Truitt Bros. Cannery north of downtown Salem after the project stalled under previous leadership.

Nearly 800 apartments, a grocery store, an automatic parking garage, a wine bar and restaurants are planned at the site.

The deal is currently under contract and expected to close this summer. Demolition would begin shortly thereafter.

Aaron Stickney, co-founder and managing member of SilverSphere Capital, said in March that funding for the sale and construction has already been secured.

436 housing units on the rise near school

A big multifamily development is under construction at Doaks Ferry Road and Orchard Heights Road near West Salem High School.

The project is set to bring 426 apartment units and 10 townhomes to the previously undeveloped site.

There will be a mix of 31 three-story buildings and three townhome buildings along with a clubhouse, a recreation area and parking.

Shopping center under construction

Kuebler Village is now being built at the southeast corner of 27th Avenue and Kuebler Boulevard near Costco.

According to city documents, the project is connected to Mosaic Management, which also owns several senior living facilities in Oregon.

A listing for the 24.64-acre parcel says Kuebler Village will be a “vibrant and dynamic, mixed-use community with I-5 visibility.”

The listing details several components, including drive-thrus, a hotel, a “destination shopping center,” multifamily housing and the Mosaic corporate headquarters.

The city approved a site plan review for a planned U.S. Market convenience store and eight gas pumps along 27th Avenue near the roundabout in 2025. Plans for a Black Rock Coffee Bar drive-thru were approved this past December.

Editor’s note: This article first appeared in The Statesman Journal and then was distributed on the USA TODAY Network via Reuters Connect.

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An 85-unit apartment complex southwest of Portland has sold for $18.85 million.

The Habitat, located at 5745 S.W. Oleson Road in the Raleigh Hills area of unincorporated Washington County, was snatched up by Crown Point Real Estate Partners, which is based in Oakland, California.

The seller, Pathfinder Partners, achieved a valuation of $221,765 per unit and $280 per square foot for the 48-year-old multifamily asset.

Marcus & Millichap’s Institutional Property Advisors represented the seller and procured the buyer.

“The property is in a premier Portland neighborhood, but within Washington County boundaries, and thus it has long been an outperformer versus similarly aged comparables,” Anthony Palladino, IPA’s senior director for investments, stated in a news release.

“Previous ownership completed renovations and upgrades on roughly 40 percent of the units and the remaining units present a clear path for continued revenue growth, Palladino added.

Palladino, Philip Assouad, Giovanni Napoli, Ryan Harmon and Nick Ruggiero of IPA, in association with David Tabata, Marcus & Millichap’s broker of record in Oregon, arranged the deal. Brian Eisendrath, Cameron Chalfant and Jake Vitta of IPA Capital Markets secured acquisition financing.

Crown Point is led by co-founders and managing partners Chris Gordon, formerly of Baker Street Advisors, and Kyle Raines, formerly of NSW Corp.
The investors recently produced a white paper about multifamily investment opportunity in Portland.

“After several years of negative net migration and flat rents following the COVID-19 pandemic and civil unrest, Portland is experiencing the early stages of a market recovery that positions forward-thinking investors to capture significant value,” Crown Point stated.

Built in 1978, Habitat offers studio, one-bedroom and two-bedroom apartments with in-unit laundry and a private patio or balcony.

The property previously fetched $15.3 million in a 2017 transaction, according to public records.

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A Portland-based business has purchased a 160-unit apartment complex in Vancouver, Washington, for $35.45 million.

Mark Desbrow’s Green Light Housing snapped up the Carriage House Apartments in a transaction that values the Southwest Washington asset at $221,563 per unit.

Green Light has transitioned from developing market-rate housing into developing and operating affordable housing, Desbrow stated in a news release.

“We have now added a workforce housing acquisition and development platform and are thrilled to expand this work into Washington state with Carriage House Apartments,” stated Desbrow, Green Light’s founder and managing partner.

The seller was Jackson Square Properties, a San Francisco-based investment group.

CBRE‘s Joe Nydahl and Josh McDonald represented both the buyer and the seller.

Well-located Vancouver multifamily properties continue to draw investment, supported by strong fundamentals, limited new supply and continued population growth, according to CBRE.

“Carriage House represents exactly the kind of opportunity that continues to attract strong investor interest in the Vancouver submarket,” stated McDonald, a CBRE executive vice president.

CBRE Debt and Structured Finance team members Nick Santangelo, Micah Springston and Matt Thorp sourced accretive financing through Fannie Mae‘s Multifamily Affordable Housing Program at a 75 percent loan-to-value ratio, CBRE stated.

Carriage House Apartments was built in 1993 at 4714 N.E. 72nd Ave. in Vancouver. Its units have two or three bedrooms. Amenities include a swimming pool, a fitness center, a clubhouse, a gated entry and surface parking.

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A 23-story, 332-unit residential high-rise in downtown Portland has sold for $63.3 million. Multifamily property owner, operator and developer Guardian acquired Ladd Tower in partnership with investment manager PCCP (Pacific Coast Capital Partners) of Los Angeles.

Ladd Tower is located at 1300 S.W. Park Ave., along the South Park Blocks. The building’s previous owner was institutional investor Invesco, according to Guardian.

Built in 2009 and rated Leadership in Energy and Environmental Design gold, Ladd Tower includes more than 255,000 square feet of residential space and a full suite of amenities, a press release states.

Guardian plans to implement an $8 million capital improvement program in the building over the next three years. The focus will be on modernizing units’ interiors and enhancing amenity spaces to align with renters’ evolving needs. The value-add strategy is designed to increase net operating income and further strengthen the asset’s position within the Portland urban core market, the press release states.

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It’s early, but the city of Portland’s moratorium on development fees appears to be moving some multifamily developers off the sidelines and into building, according to permitting data and interviews.

In fact, it led one developer to propose a new project. Joe Westerman on May 1 requested early assistance from Portland Permitting & Development for a four- to five-story mixed-use building with 158 apartments in 213,644 square feet at Northeast Sandy Boulevard and 52nd Avenue.

If the project were to advance, it would represent a rare boost of supply to Portland’s tight housing market.

“I’ve been building apartments in Porland for 30 years, and I kind of got away from it when working with the city got so unruly,” Westerman said.

So, what changed?

“Portland is incentivizing developers with not having to pay the system development charges,” he added. “It’s probably going to be $3 million that you don’t have to pay. That’s – that’s nice.”

System development charges fund city infrastructure through various city bureaus, but the fees have drawn blame for discouraging housing proposals by increasing costs.

SDCs average about $20,000 per unit; they can range from $15,000 to $35,000 per unit, according to a City Council document.

Only 818 market-rate housing units were produced in Portland in 2024 — the lowest rate in more than a decade. In response, the City Council last summer approved a moratorium on SDCs that will last until Sept. 30, 2028.

The development fee moratorium is helping keep projects alive, said Ezra Hammer, a land-use attorney at Ballard Spahr.

“For a pro forma that has seen compression over an entitlement period, the SDC waivers are helping with that compression,” he said.

Hammer said he’s also fielded increased interest from “out-of-town folks who are pleasantly surprised about the tonal shift we’re hearing.” That’s after Portland’s reputation soured amid pandemic shutdowns, protests and regulatory obstacles.

“The city appears to want to attract investment in multifamily housing,” Hammer said. “I haven’t seen those projects materialize yet, but it’s a big shift from the world we were in before where capital had absolutely no interest in Portland.”

Portland Permitting & Development is tracking an uptick in building permits issued since the fee moratorium began in August 2025. Some projects that had apparently stalled were given building permits.

As of Jan. 15, 265 new housing units complied with the program for a total of $6.68 million in SDC exemptions — an average of $25,221 per unit. An additional 207 units have had their permits issued and are on track to receive $4.17 million in development fee exemptions but have not yet completed compliance in the program, according to the agency. The city ordinance that created the exemptions requires new housing projects to pour a concrete foundation within 12 months of permits being issued.

PP&D is expected to present a full report on the program to the City Council after Aug. 15, when the exemptions will have been in place for a year.

“We see indicators that the SDC exemption is helping new housing units get developed,” PP&D spokesman Ken Ray stated in an email. “It is early in the program, and we expect we’ll have a clearer picture this fall after we’ve had a year’s worth of activity to review.”

The moratorium and builder-friendly vibes could even be enough to get someone like Westerman — a longtime Portland investor — off the sidelines. His JMW Properties owns four multifamily properties in Portland, one in Vancouver, Washington, and one in Medford. Westerman has brought on board Koble Creative to design the Sandy Boulevard project, which is named Rose City Mixed-Use in early planning documents.

“This could be a really amazing project,” Westerman said. “It has a beautiful southern exposure. You could have on the second floor an atrium, and … units on the inside. You could have fresh air in there; you could have skylights in there.”

Westerman said he wants to build relatively roomy studios and apartments with one or two bedrooms rather than the micro-units that some developers have built to boost rental rates per square foot.

Westerman owns the entire block, including the building at 5137 N.E. Sandy Blvd. that hosts the discount store Friday Deals. The larger building at 5201-5223 N.E. Sandy Blvd. includes G.O.A.T. Bar and Hollywood Fitness, a longtime neighborhood gym owned by George Camalli.

Westerman said he hopes Hollywood Fitness will be the anchor tenant in the new building, in a 10,000-square-foot storefront space. “I like that — having to deal with one tenant,” he said.

The project could also affect the Rose City Food Park. But the food carts may be able to move to the block’s west end, Westerman said.

Koble Creative previously designed Westerman’s Cedar Commons development in Medford.

“They’re a good local architect,” he said.

Westerman, a contractor, expects to perform the construction in-house.

A new outlook in the city government gained Westerman’s attention, he said, in contrast to what he considered an anti-developer stance when the permitting agency was overseen by former city commissioner Chloe Eudaly.

“The permits center became an area of ‘no,’ and I think that’s changing,” he said. “We are going to early assistance to find out all of the issues if there are issues, and then we’ll do a cost model and a pro forma model. And we’ll see if it papers out.”

Westerman also owns a large swath of land in Gateway that he’s so far been unable to redevelop. He also suggested he’d be happy to take on investors for the Sandy Boulevard development.

“Anyone who would like a partnership, give me a call,” he said.

Portland needs more housing, and it also needs some good news, Westerman said.

“It’s easy for me not to be happy with Portland,” he said. “But the bottom line: I would like to be part of the solution.”

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A 167-unit Northeast Portland apartment building has sold for $30.7 million to a California investment group.

Grant Park Village Quimby, completed in 2018, was purchased by Laurel Property Group of Beverly Hills, California. LPG specializes in managing multifamily properties for family offices and wealthy investors.

The seller was the property’s developer, Capstone Partners, alongside PCCP, a Los Angeles-based real estate investment manager.

The transaction values the 117,333-square-foot asset at $183,832 per unit, or $262 per square foot.

“Grant Park Village Quimby represents exactly the type of institutional‑quality, transit‑oriented asset that investors are seeking in today’s market,” Joe Nydahl, a CBRE executive vice president, stated in a news release. “The property’s finishes, location fundamentals and the limited future supply pipeline in the Grant Park submarket position it well for long‑term performance.”

Nydahl and Josh McDonald represented both the buyer and the seller in the transaction, with support from Scott Williams and Ryan Jameson of CBRE Debt and Structured Finance.

The building at 1580 N.E. 32nd Ave. is in the Sullivan’s Gulch neighborhood and sits adjacent to its sister property, Grant Park Village Henshaw. The properties are north of Interstate 84 and next to a Fred Meyer store.

The apartments in Grant Park Village Quimby are studios or have one or two bedrooms; they average 554 square feet. The midrise community features modern unit finishes and a range of resident amenities, including a fitness center, a resident lounge, an outdoor courtyard and a pet spa.

The property sale was recorded on April 21, according to Multnomah County records.

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A 52-unit multi-family property in Tigard has sold for $10.85 million.

“The sale of York (Apartments) is the third disposition in a group of garden-style apartment properties that we acquired in the Portland region in 2019,” Max Sharkansky, managing partner at Trion Properties, stated in a news release. “When factored together, the sale of the three-asset portfolio generated an (Internal Rate of Return) of more than 29 percent.”

The other assets in the portfolio—The Parker and Aster Parc Townhomes—sold in May and July of 2022, respectively.

HFO Investment Real Estate handled the transaction. Rob Marton, partner, represented Trion in the sale, and Greg Frick, co-founder and partner, managed the process for the purchaser of the property. According to Washington County public records, the buyer is identified as 7580-7582 SW Hunziker St. Holdings LLC.

York Apartments is a 52-unit garden-style apartment complex with three studio units, 48 two-bedroom, one-bath units; and one four-bedroom, two-bathroom unit. The property is at 7582 SW Hunziker St. in Tigard.

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