Portland Industrial Market Report

Resumed net in-migration helps drive industrial tenant demand. The metro is set to record annual household formation of 1.2 percent in 2024, Portland’s second-largest increase in the last decade amid positive net in-migration for the first time since 2020. This residential growth is poised to continue driving warehousing and distribution tenant demand following Amazon’s move-ins totaling 590,000 square feet last year, which prompted leasing of last-mile space soon thereafter. Another period of below-average deliveries in 2024 will also benefit fundamentals. As more tenant demand is directed to existing units, net relinquishment lowers from 1.5 million square feet in 2023 to less than a quarter-million expected this year. Overall, asset performance is strongest along the Interstate 5 Corridor and in the Southeast submarket. Entering this year, these areas recorded year-over-year vacancy compression, bringing their rates to post-pandemic lows. Looking past this year, a fully-leased 533,000-square-foot distribution center completing in Gresham in 2025 reaffirms tenant demand here as nearby thoroughfares connect to Boise and Salt Lake City.