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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Owen also forecast that targeted future development could succeed.

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

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

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

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

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

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The Oregon Museum of Science and Industry (OMSI) is transforming its 7,000-square-foot Natural Sciences Hall into a space designed to deepen public understanding of climate-related challenges and community-level actions.

The renovation will begin once the hall closes to the public on Tuesday. The updated space, expected to open in spring 2026, will be named the Nancy Stueber Natural Sciences Hall after OMSI’s former president and CEO; she retired in 2020 after 38 years at the museum.

Bearing Architecture designed the project. The team also includes structural engineer VALAR Consulting Engineering and general contractor Walsh Construction.

The hall’s current Science on a Sphere exhibit will return. Also, access through the hall to the museum’s upstairs labs will remain. The museum’s prenatal exhibit will reopen in a different area of the hall. The remainder of the space will be renovated, including construction of new walls, additions of murals, and installation of new lighting to lower energy costs. Key activations in the hall focusing on renewable energy, sustainable living and conservation were developed in partnership with Portland General Electric, a sponsor of the renovation.

A new permanent, interactive exhibition will illustrate the relationship between humans and the environment. “Climate of Change/Clima de Cambio” will feature narratives from the communities in Oregon most affected by climate change.

“We want to invite visitors to explore in hands-on participatory ways how climate change is affecting our region here in the Pacific Northwest, both in our ecosystems and in our communities,” said Ciera Iveson, OMSI’s creative director.

Key climate science concepts and climate solutions will be presented, she said.

The climate impact message carried through the project’s design. OMSI is working with Timberlab to create an entrance using reclaimed yellow cedar left over from construction sites. Inside, tan oak will be used. The team will use mainly reclaimed wood that otherwise would have become waste, Iveson said.

The project’s theme is reclaiming waste, sourcing local building materials, and minimizing use of anything that in the long run would be discarded, she added.

Hall features will include: an immersive multimedia experience developed by Tellart that highlights the interconnectedness of humans and the natural world; design showcasing the beauty of the Pacific Northwest through landscapes, textures, and ecosystems; and other interactive, hands-on elements and education modules.

“We’re putting in a story theater where we’re sharing some documentary films we’ve been shooting of local communities here in the Pacific Northwest and their solutions,” Iveson said. “That’s going to be a really beautiful part of this installation.”

Donors, trustees and sponsors in the past few years have provided support for the project, Iveson said.

The museum’s “Accelerated” campaign raised $6.75 million from 2020-2025 in support of OMSI District plans. Approximately $2 million was allocated for the Nancy Stueber Natural Sciences Hall. Officials also garnered approximately $2 million in federal grants (from the National Science Foundation and the Institute of Museum and Library Services), of which $1.5 million was rescinded, Iveson stated in an email. When the grants were terminated, OMSI reduced the project scope and allocated operational funds to its partners to ensure key exhibition elements of the exhibitions could be preserved, she added.

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HHPR, a Portland-based engineering firm, is recognized for its innovative solutions and commitment to improving the built environment. Specializing in civil and structural engineering, HHPR works across multiple sectors, including education, healthcare, commercial and residential development.

Founded in 1990, the firm has built a reputation for delivering high-quality engineering services that emphasize both functionality and sustainability. HHPR’s team of experienced engineers collaborates closely with clients to design cost-effective, durable and environmentally responsible solutions tailored to the unique needs of each project.

“At HHPR, we prioritize building strong, long-term relationships with our clients, understanding that a successful partnership is built on trust, transparency and communication,” said Nicole Gelow, marketing assistant at HHPR.

This emphasis on collaboration sets HHPR apart. By fostering strong relationships with clients, contractors and the community, the firm ensures projects are completed on time, within budget and with a focus on long-term performance.

From large-scale developments to smaller, community-based projects, HHPR’s portfolio reflects its dedication to creating spaces that are structurally sound while enhancing the quality of life for those who use them. With a proven track record and a forward-thinking approach, HHPR remains a leading force in shaping the built environment in the Pacific Northwest.

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