Office vacancy in Portland remains high, could be here to last
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The office vacancy rate for the Portland metro area is going up.
The big picture: Reduced demand for office space after the pandemic is still shaking up the region's real estate market, as long-term tenants and major companies continue to flee the city's center.
By the numbers: The Portland metro area's office vacancy rate reached 19.3% in 2024, continuing a steady upward trajectory since 2015 that accelerated after 2020, per Moody's latest report.
- The region's office market saw the largest vacancy rate increase in the last quarter of 2024 compared to all other major metros.
Zoom in: The vacancy rate in the City of Portland was even higher, according to CBRE's end-of-year analysis, at 24.7%.
- Yes, but: The report notes some bright spots, including willingness on the part of prospective tenants to commit to longer leases and lack of new construction "suggests the market may be moving towards stability."
The bottom line: Moody's report recommends demolishing out-of-date office buildings, or converting them into apartments, which tends to be easier said than done.
- The firm's head of commercial real estate economics added that reduced demand for office space could be permanent thanks to remote and hybrid working.