The PacWest Center in downtown Portland has sold to an Alaska buyer at a steep discount, according to a report.

Willamette Week late Wednesday that the property sold for $55.7 million, or $101.64 per square foot. The price is less than half its most recent pre-pandemic transaction, but higher than the price for another iconic tower that recently sold.

A deed of trust filed with Multnomah County on Thursday shows the buyer used a $44.58 million loan from the First National Bank Alaska, based in Anchorage. Another public filing, the special warranty deed, shows the property sold for $10 “and other good and valuable consideration,” hiding the true purchase price.

Fountainhead Development, based in Fairbanks, Alaska, purchased the 30-story office building, the fourth-tallest building in Portland, from an entity linked to Lincoln Property Co.

The 547,992-square-foot building at 1211 S.W. Fifth Ave. was developed beginning in 1984 by Tokyo-based Mitsubishi Estate Co. and completed in 1988. It was extensively renovated in 2019. The sleek silver tower is well-known locally for its outdoor tree, planted on the 25^th floor.

The building last traded hands for $161.5 million in December 2007. Commercial real estate in Portland has traded at much lower prices since the pandemic emptied out downtown office towers. The city has approximately 9 million square feet of vacant office space.

PacWest’s recent sale gave it a significantly higher valuation than the U.S. Bancorp Tower — better known as Big Pink — earned when it sold for $45 million, or about $39.13 per square foot, in July.

Newmark Vice Chairman Nick Kucha, Senior Managing Director James Childress and Directors Kellen Kollmorgen and Jakob Nicholls represented the seller.

“PacWest exemplifies resilience and opportunity in Portland’s evolving office market,” Kucha said in a prepared statement. “With its transit-oriented location, market-leading amenity package and premium view space, the buyer recognized the tower’s ability to cater to both traditional and creative tenant requirements in a location with enduring demand drivers.”

The property is 50 percent leased, primarily by legal, banking, wealth and investment management firms, according to Newmark.

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Office users nationally said they expect to grow or maintain their footprints as in-office attendance continues to improve, according to a CBRE survey.

Office occupants’ expectations are “trending towards growth,” said Julie Whelan, an office occupancy analyst at CBRE.

Forty-three percent of respondents said they expected to expand their office space, while only 33 percent expected to use less space. The remainder, about one-fourth of respondents, expected their office space to remain the same.

The results from CBRE’s , released Monday, suggest the office market is continuing to gradually strengthen as it emerges from the pandemic-era doldrums.

The survey drew responses from 185 executive office occupiers in North America.

“We feel very strongly that this data gives us great sentiment about what our office markets are going to do over the coming years,” Whelan said.

Office analysts continue to see a trend of tenants chasing top-quality space. Many office users are “upgrading but downsizing” as they adjust to hybrid work policies, Whelan said.

The tight supply in the prime segment is only expected to grow scarcer as the construction pipeline is poised to deliver little new office space in the foreseeable future. The U.S. construction pipeline in the second quarter was about 21 million square feet.

“We’re going to end up this year with the lowest amount of office space delivered in a calendar year in the last decade or so,” said Manish Kashyap, CBRE’s global president for leasing.

Few tenants are trading down for more space. Instead, companies seek centrally located offices with excellent transportation options and a strong complement of amenities, and they’re willing to squeeze into smaller spaces as needed, Kashyap said.

“The dichotomy in the market is the scarcity is actually in better located, highly desirable offices,” he said. “That’s where the challenge is.”

Most companies have settled into a hybrid work schedule, with offices bustling midweek but more employees choosing to work from home on Mondays and Fridays, CBRE analysts said.

“A lot of American offices feel awesome on Wednesday at this point, but they do feel pretty pokey or uninspiring on Mondays or Fridays,” said Jamie Hodari, CBRE’s chief executive officer of building operations and experience. “I have found very few companies that have found a way to crack that particular code.”

More companies are tracking office attendance, with 69 percent of respondents monitoring office use, up from 45 percent a year ago.

“These increases show that companies have made significant progress on establishing a new baseline for work habits and office attendance after five years of adapting to hybrid work,” Kashyap stated in a news release.

Office attendance averages 2.9 days per week, a figure that continues to lag pre-pandemic levels.

The use of amenities to attract tenants has skyrocketed. Since 2021, CBRE has seen a 56 percent increase in office space allocated to amenities, said Lenny Beaudoin, the firm’s executive managing director for global workplace, design and occupancy.

Office tenants are looking for strong public transportation, ample parking for motor vehicles, strong food and beverage options, and good indoor air quality, the analysts said.

Evidence of improved sentiment among North American office users comes as Portland’s market has continued to lag. Office vacancies have climbed for 11 consecutive quarters, and set record highs, according to Kidder Mathews.

Portland saw 235,192 square feet of negative net absorption during the second quarter of 2025, according to CBRE’s most recent report. Vacancy rose to 26.6 percent but varied widely by submarket.

Tigard and Clackamas recorded less than 12 percent vacancy, while Portland’s central business district and Northwest Portland had more than 36 percent.

Rents in the Portland area rose to $33.11 per square foot on average. The average asking rent for class A space rose to $38.18 per square foot, while class B commanded $29.08 per square foot on average.

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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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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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Asking rents for Class A office space in the Portland-metro area fell in the second quarter as vacancy rates rose, led by 23 percent vacancy in the central business district, according to a new report.

Vacancy overall rose to 19.5 percent, up from 18.1 percent in the prior quarter, Colliers stated in its second quarter report.

The average direct asking rent fell to $36.83 per square foot in the central business district, down from a high-water mark of $38.57, which was set a year ago.

Demand was strong in suburban markets, particularly Hillsboro and the Sunset Corridor. Asking rents increased 6.5 percent to $31.68 per square foot for Class A space compared to a year ago, Colliers reported.

“As a market, Portland has some positive stories here and there,” said Jacob Pavlik, research manager for Colliers in Portland. High-quality, Class A office space continues to lease well, he said.

Submarkets vary widely. Within Portland, Slabtown and the Pearl District have seen strong leasing activity.

One of the most popular spaces has been Tanner Point, a Pearl District office building that was completed in 2018. Ampere Computing recently expanded, taking the top two floors. On Footwear also recently agreed to lease a floor at Tanner Point, and Brainium Studios moved in last year.

Among the top leases during the second quarter were Ampere’s deal for 53,000 square feet, Apple Inc.‘s lease for 50,000 square feet in the Sunset Corridor and SERA Architects‘ 43,000-square-foot commitment to the newly renovated Galleria building in downtown.

“Everybody wants something a little different,” Pavlik said.

Pavlik noted more amenities such as restaurants and food carts have reopened, lending some liveliness to downtown.

“There’s just a lot more energy,” he said.

Approximately 1.4 million square feet of office space is under construction in the Portland-metro area. Among the major projects in the pipeline:

• The Galleria, 156,000 square feet, delivering third quarter;
• PAE Living Building, 60,860 square feet, delivering third quarter;
• Eleven West, 102,000 square feet, delivering third quarter 2022; and
• Block 216, 155,000 square feet, delivering second quarter 2023.

After that, the pipeline is parched for additional supply, suggesting the current environment of high vacancy could be short-lived.

“The supply that we have now – with a few notable exceptions – is the supply we’re going to have for the next couple of years,” Pavlik said.

Office projects also must deal with the seesaw of changing worker and executive expectations. Some companies, including Apple, have postponed returns to the office in light of surging COVID-19 cases.

“I still think people are just trying to figure out, does telecommuting work?” said David Kotansky, managing director at Colliers. “Does home office work? And if it does, what does it look like?”

Kotansky said he favors returning to the office.

“I’m a big believer in people being in the office and working together,” he said. “That environment is good for the office.”

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5 MLK stands a muscular 17 stories on a full block at the Burnside bridgehead, making the audacious statement that business can be done just as well in Portland’s close-in Eastside as it can across the river in downtown.

Designed by Chicago’s GREC Architects with nods to neighbors such as the looming Yard building, 5 MLK was a $110 million bet by The Green Cities Co. on Portland’s once-soaring commercial real estate market. The building is stuffed with amenities for office tenants, including high-tech air circulation that can be segregated from residential units, private outdoor terraces and a sprawling gym.

What 5 MLK does not have is an office tenant. The gleaming new building has 120,400 square feet of newly constructed Class-A office space – every bit of it vacant. For now, the owners are missing out on about $4 million a year that the office space on floors two through six would bring when fully leased.

The tower is one of many new office buildings that have run headlong into a global pandemic, an unforeseeable event that has frozen commercial real estate. How projects like 5 MLK bounce back from the pandemic will have a significant impact on Portland’s overall economic recovery.

“We have a large inventory of space (in Portland),” said Kelly Saito, one of four managing partners at The Green Cities Co., which formerly was the investment arm of local developer Gerding Edlen. “There were new deliveries before us which maybe paved the way for establishing the newest generation of new buildings within the city.”

Many projects to renovate existing buildings have made some older products more competitive with new office space.

“Over the same period of time, we had a number of the existing (Class) A-B buildings downtown that have been repositioned, renovated, had amenities put in,” Saito said. “So on top of the new construction, there’s a fair amount of inventory of existing space that’s been renovated or is being renovated.”

Since the pandemic emerged a year ago, there has been very little leasing activity in Portland as office tenants waited to make any major decisions. 5 MLK received its first temporary certificate of occupancy in September.

(5 MLK, a mixed-use building, also has 220 apartments that last week were 16 percent leased as well as 14,000 square feet of retail space. An underground garage has approximately 158 parking spaces.)

Total office vacancy in Portland rose to 15.3 percent in 2020, up from 12.3 percent a year earlier and the highest mark since 2010, according to JLL. Average asking rates slipped slightly to $33.61 per square foot.

Saito said asking rents at 5 MLK are in the “mid-$30s” per square foot on a triple-net basis. Apex Real Estate Partners is representing the space.

Before the pandemic, developers largely agreed that the dream of the 2020s was alive in Portland. In-migration boomed in recent years as Seattle and Silicon Valley tech companies relocated or expanded in the more affordable Silicon Forest. That changed in 2020, when net migration fell to about half of its 2016-17 peak, according to the Oregon Office of Economic Analysis.

Commercial real estate experts are watching for any signs of the market emerging from the pandemic. The effects of the pandemic are hard to overstate: Actual physical occupancy of U.S. offices fell to 17.6 percent on average, according to JLL, as workers stayed home in droves.

Companies such as Facebook have signed major leases in cities such as New York and Chicago, while also rolling out accommodating work-from-home policies. That’s drawn questions about how resilient the office market will be in 2021 and years to come.

It’s not yet clear what the new normal looks like, Saito said.

“Clearly, there’s downward pressure in general given both inventory and where demand has fallen to,” he said. “And demand has diminished in the short term, for sure. That’s directly related to working from home. There’s no question that when things return to normal, that normal will be different to some extent – and there’s a lot of projections being made about what that might look like.”

While questions remain about the future of office space, the sector may be buoyed by a broad economic recovery. Many economists are forecasting a strong rebound as the U.S. emerges from pandemic-related shutdowns in an atmosphere of low interest rates and pent-up consumer savings. Wall Street titan Goldman Sachs, for example, earlier this month raised its forecast for U.S. GDP growth to 6.8 percent in 2021.

That should trickle down to office demand, said Ryan Severino, JLL’s chief economist.

“As the economy bounces back, you should see a commensurate change in demand as well,” he said during a Feb. 11 webinar.

Physical occupancy should also come back to near pre-pandemic levels, Severino said.

“We reasonably expect that by the end of the year, the majority (of) people would be back in an office space,” he said. “Remote work is going to expand, but we don’t see this as being the death knell for office and the demand for office space. Employees do want to be in an office.”

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ScanlanKemperBard, a real estate merchant bank based in Portland, has purchased Parkway Woods Business Park, in Wilsonville, for $32.3 million.

The property has 390,233 square feet of office, production and manufacturing space on 88.28 acres east of Interstate 5.

Parkway Woods is 79.5 percent leased to Xerox, 3D Systems, Dealer Spike and the Tualatin Valley Water District. The offices are in a single story and offer ample parking, with 3.3 spaces per 1,000 rentable square feet.

Newmark Knight Frank arranged $36.1 million in acquisition financing from Bridge Investment Group on behalf of SKB.

“Bridge understood the Portland industrial market dynamics and shared SKB’s belief in the city’s attractive long-term secular growth trends driven by its accessibility to transit, a growing amenity base and meaningful amount of high-quality residential development,” NKF Vice Chairman Ramsey Daya stated in a news release.

Daya, Senior Managing Director Chris Moritz and Associate Director Stephen Scarpulla of NKF’s Debt and Structured Finance team in the San Francisco office executed the financing on behalf of SKB.

Information on the seller was not immediately available.

The property, 26600 S.W. Parkway Ave., previously sold for $32.7 million in December 2015, according to Clackamas County records.

CBRE is representing Parkway Woods leasing. The brokerage was advertising 106,050 square feet available for lease, divisible to 50,000 square feet.

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Uncertainty and disruptions in Portland’s office market are likely for months to come, but the local sector entered the coronavirus crisis in a relatively strong position, according to new data.

Net absorption during the first quarter was a healthy 112,667 square feet, according to a Jones Lang LaSalle report.

Vacancies are expected to grow with 1.5 million square feet of office space to be delivered this year. Some of those deliveries are likely to be delayed by coronavirus-related obstacles, according to JLL.

The first-quarter vacancy rate was 12.1 percent.

Rent growth moderated during the period as the office market neared or reached a cyclical high, according to JLL. The average asking rent was $34.08 per square foot. In Portland’s urban core, spanning downtown, Northwest, close-in Eastside and the Lloyd District, average asking rent was $38.59 per square foot.

JLL signaled Portland may be in a good position to bounce back from the economic downturn, as it has “one of the most diversified economies in the country and is less vulnerable to disruption compared to other cities in the U.S.”

The real-estate firm sent up a warning flare for what had been a fast-growing element of the office market.

“Perhaps the largest cause for concern in the office sector is that of coworking,” JLL stated. “The industry cluster is responsible for 38 percent of total U.S. net absorption over the past two years. In this regard, Portland is somewhat insulated as coworking and executive suites account for just 1.5 percent of total office inventory, the lowest on the West Coast and one of the lowest in the country.”

Major lease signings during the first quarter included Square leasing 64,000 square feet at Aspect on Sixth, Tanner Point‘s top two floors going to Ampere Computing, according to a city permit, and Skanska and Skyward IO completing the leasing at 1010 Flanders.

Construction is under way on Eleven West in downtown’s West End, the renovation of 710 Oregon Square by American Assets Trust, and BPM Real Estate’s Block 216 mixed-use tower.

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A two-building office property in Portland’s Pearl District has sold to a fund managed by Rialto Capital Management LLC for $36.5 million.

The purchase comprises Fremont Place I and II – one two stories and the other three stories – at 1650 and 1750 N.W. Naito Parkway. The buildings offer a total of 123,600 square feet of office space. The buildings are 63 percent leased to tenants in the telecommunications, engineering, health care and other industries, according to a Jones Lang LaSalle news release.

The transaction equates to $295 per square foot.

Multnomah County recorded the transaction on Feb. 14. Rialto used a limited liability company, RREF III-P Fremont Place, registered in Miami. The seller was Fremont Place LP, an entity linked to Lincoln Property Co. of Dallas.

JLL secured a $37.3 million five-year acquisition and bridge loan from a debt fund. The loan will be used for the acquisition as well as interior and exterior renovations.

Rialto Capital aims to transform the buildings, constructed in 1987, into an “urban waterfront campus,” according to JLL. The buildings are along the Willamette River just south of the Fremont Bridge.

The new owner plans to build an outdoor amenity space.

JLL’s Capital Markets team representing Rialto Capital was led by Managing Director Casey Davidson and Director Zachary Kersten.

Lincoln Property Co. will continue to manage the office properties, and is moving forward with plans to build the Fremont Apartments, a 17-story multifamily building, on an adjacent parcel that currently serves as a surface parking lot for the office structures.

According to Patrick Gilligan, an executive vice president with Lincoln Property Co., the firm is partnering in a joint venture with Utah-based opportunity zone funder Bridge Investment Group. A $7.2 million foundation permit for the project is under review; Gilligan said the firm hopes construction will start this spring and finish in 2022.

The TVA Architects-designed project received the go-ahead in 2018 when the Portland City Council rejected an appeal from the Pearl District Neighborhood Association of prior approval issued by the Design Commission. Andersen Construction will serve as general contractor.

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For a Portland office building of a certain age, 2019 seems to be the time to get that face-lift.

The Wells Fargo Center, Portland’s tallest building, completed in 1972 and purchased by Starwood Capital Group in 2017 for $188 million, will receive new canopies and landscaping. The neighboring data center structure will get a new lobby and rooftop deck, and a drive-through bay will be removed.

In Northwest Portland, One Pacific Square will get an extensive renovation to the lobby and plaza areas with an eye toward attracting a tenant to replace NW Natural, which will vacate approximately 180,000 square feet some time in 2020 for new space in the 250 Taylor building. The older 13-story building, completed in 1984, was purchased by New York Life and local partner Specht Development in January 2018.

“We believe we can bring this building to life after the gas company leaves at a price that is very competitive,” said Greg Specht, chief executive of Specht Development.

Office repositioning projects are not new, but a long period of economic expansion, growing in-migration to Portland, existence of institutional investors flush with capital, and competition from newly constructed office buildings has resulted in a rush of renovations.

“You’re seeing this final push,” said Jake Lancaster, a managing director for Jones Lang LaSalle in Portland. “The majority of the buildings that have been built over the last 20 to 30 years have been getting upgrades or improvements. Most of the buildings have been traded or sold. The market has proven that by making the investment, the tenants will come and they will pay the rates to be in upgraded real estate.”

The raft of projects is characteristic of a mature real-estate cycle, analysts said. With newer office properties in desirable locations earning lease rates of $36 per square foot or more, owners of older properties are racing to catch up and hike rates to match or come close.

At the same time, tech companies want different office environments than the old-guard law and accounting firm spaces in many of Portland’s office towers. Cubicles are out, and Silicon Valley-inspired open-plan offices with foosball tables and baristas are in.

Portland’s office market saw 9 percent rent growth in 2018, according to JLL. Vacancy rose to 13.1 percent. Absorption was negative, with 306,780 square feet added to the market as office users including Wells Fargo, Jive and the Art Institute of Portland vacated office space.

First-quarter 2019 data was not yet final, but absorption for the period is expected to be slightly positive, according to JLL.

Not only older buildings are being targeted for renovations. Tanner Point, formerly known as 9North, is set to undergo a retail makeover and other interior renovations. The eight-story North Pearl District property was completed in October.

CBRE Global Investors purchased the 182,851-square-foot building from Williams & Dame Development and Global Miller Properties for $76.6 million shortly after it was delivered to market.

Kevin Kaufman, a CBRE vice president, said the investment arm underwent a “data-driven process” based on national and local trends in deciding to reposition the newly constructed building to attract tenants.

“We think that type of approach here will help Tanner Point,” he said.

For new construction, several major projects are on the way, including the office portion of the Press Blocks that will bring more than 193,000 square feet of office space to market. Also, District Office in the Central Eastside from Beam Development and Urban Development + Partners will add approximately 72,000 square feet and 7 S.E. Stark from Harsch Investment Properties will have about 70,000 square feet of leasable office space.

“There has been a tremendous push in the new construction pipeline and deliveries,” Lancaster said.

Further out, construction of the 35-story Block 216 project from Walter Bowen’s BPM Real Estate Group is expected to begin this spring or summer. The tower-and-podium project would bring approximately 167,000 square feet of office space to market.

Construction of Eleven West, another mixed-use project from Gerding Edlen Development and Downtown Development Group at Southwest 11th Avenue and Washington Street, has not begun despite design approval being given in December 2017. Eleven West would add 110,000 square feet of office space.

The ample development pipeline is causing some observers to question whether Portland’s office market can absorb all of the new space.

“There is way too much office available,” said Jordan Menashe, principal at Menashe Properties, a Portland-based property management and development company. “It is insanity.”

Menashe said there’s a mismatch between the mostly smaller prospective tenants in the marketplace and the large spaces being offered.

“It’s all the same amenities, and the same floor plate sizes, and it’s all not catering to the Portland tenant,” he said.

Yet for now, rent growth remains strong and investors keep coming. On March 15, Intercontinental Real Estate Corp of Boston announced it had acquired Heartline’s five-story office and retail building in the Pearl District totaling 72,130 square feet. The sale price was not disclosed and was not yet available in Multnomah County records.

Another major office trade is anticipated with the Bill Naito Co. expected to sell the Montgomery Park building in Northwest Portland, with 850,540 square feet, to an institutional buyer. A repositioning project could follow.

“There’s tons of institutional money out there, and it has to go somewhere,” Menashe explained. “And Portland still is affordable compared to Seattle, San Francisco, Los Angeles, downtown Denver.”

Kaufman also said he expects the office market to remain healthy.

“I don’t think we’re headed to a point – in the Portland market anyway – where you will see massive spikes in vacancy,” he said.

Lancaster said the development pipeline is poised to slow after the current round, aiding absorption of the new space.

“Our market is about slower and incremental absorption,” he said. “That will be the case as well with this round of absorption through 2020. The majority of the capital that’s invested in new construction, it’s very patient capital.”

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