Timing the Industrial Market

The big news in the Portland commercial real estate market recently was a significant industrial lease announcement at the PDX Logistics Center, along with plans to add even more square footage in a phase II of the project.

According to the Portland Business Journal, the industrial real estate market has seen a decrease in vacancy from 5.7 percent in Q2 2014 to 4.8 percent in Q@ 2015, and an accompanying increase in rents by more than 9 percent.

What does all this mean for the manufacturers, distributors, and logistics companies that rely on accessible and affordable commercial real estate?

Industrial land availability in general is becoming quite limited in the Columbia Corridor, and the PDX Logistics Center is exemplary of forward thinking that took place when market conditions were less rosy.

Projects such as this that are only now coming to market have taken several years to develop. The acquisition, planning and development process were done largely during the downturn when demand was questionable and pricing of land less costly. The tide has turned with increased occupancy and higher demand for newer ground-up projects for both small and large alike. Timing is everything and players new to the market are finding lack of availability and increased pricing making for higher costs in the short run.

Right now, it is important for companies looking for space, or looking to purchase industrial land, to have a long-term perspective. If you think an expansion or relocation is in your future, it is well worth your time to start thinking and planning now. And make sure you have secondary locations in mind. What is now your first choice may be unavailable by the time you need it, but other regional locations may be equally suitable and more affordable.