Portland Retail Investment Forecast
In-Migration Trends Underpin Retail Demand;
Attractive Pricing and Upside Potential Capture Investor Interest
Influx of new residents provides retail spending boost. Oregon rescinded nearly all COVID-19 restrictions placed on businesses last June, which drove demand for more in-person activities. In response, leasing velocity accelerated in the suburbs, lifting annual net absorption to positive territory for the first time since 2018. The strong performance during the second half of 2021 provides optimism for Portland's retail sector heading into this year. Affordability in the region is attracting residents from more expensive West Coast metros and employment growth continues to outpace the national average, further bolstering the metro's consumer base and spending power. Additionally, CBD foot traffic should increase as more firms return to the office and business travel continues to rebound. This could potentially elevate leasing activity downtown, where vacancy is the highest in the metro. Furthermore, only 350,000 square feet of retail space is scheduled to deliver this year. Limited development metrowide will steer expanding retailers to existing inventory, promoting further vacancy compression this year.