Oversupply of Portland Office Space Declines as Business Resumes

CoStar says the past two quarters have seen an incremental but steady decline of available sublease space.

pioneer escalators Escalators in Pioneer Place Mall. (Brian Burk)
By Sophie Peel

Portland office space is slowly but steadily filling up.

CoStar Analytics, a commercial real estate advisory service, sent out a report Sept. 30 to its Portland clients about the status of space available to sublet in Portland. The numbers show just how much available sublease space increased over the course of the pandemic, and how it’s slowly but steadily falling as companies return employees to the office.

In 2019, there was only 750,000 square feet of sublease space available in Portland. In the first quarter of 2021, that measure—an indication of companies seeking to exit their leases early—had risen to nearly 1.6 million square feet.

But CoStar says the past two quarters have seen an incremental but steady decline of available sublease space, with a 3% decrease in the second quarter and a 5% decrease in the third, signaling that businesses are filling vacancies downtown.

The available sublease space has declined to around 1.47 million square feet.

“Of the 10 largest leases signed in the downtown thus far in the third quarter [of 2021], five have been sublet space,” CoStar reported. “This is a positive sign the market may be turning a corner, but landlords and investors should refrain from cheering prematurely.”

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