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Talk to most commercial real estate experts and you’ll hear that downtown Portland is a smoking crater, occupancywise, and that things are only going to get worse as workers cling to home offices to avoid a downtown reeking of fentanyl.
Patricia Raicht, head of research for the Western U.S. at Jones Lang LaSalle, has a contrarian take.
Her research shows that another 460,000 square feet of office space in the metro area emptied out in the first quarter, but “the pace of losses is slowing, and demand indicators are improving,” she writes in the Q1 report.
Among the green shoots, she says: Daimler Truck asked office employees to come in four days a week, up from two. As a result, Daimler plans to reoccupy 107,000 square feet of space in Montgomery Park rather than sublease it, Raicht says. Other companies, including Deloitte, Umpqua Bank, and Smarsh, have agreed to take space after giving it up during the pandemic, she says.
“If everyone comes in just on Wednesday, you still need a place for everyone to sit,” Raicht tells WW. “I think people want to be in the office more.”
Another upbeat statistic for the greater Stumptown area: While urban vacancy is tied with Phoenix for fourth-highest in the nation, at 28.7%, according to JLL, suburban vacancy is the second-lowest, at 13%. Only the San Diego ‘burbs are performing better.
Any revival in the urban core comes too late for many buildings. Montgomery Park, for one, went to foreclosure auction in February. No one bid, so the building went to its lender, Natixis, based in Paris.
(Correction: JLL corrected their quarterly report to show that Smarsh, not Navex, has committed to taking more office space.)