Portland Office Figures Report Q4 2024

Portland’s office market is heading into 2025 on a note of optimism – commercial real estate professionals have noted a late-year uptick in tenant demand and a sustained increase in tenants’ willingness to commit to longer lease terms. However, 2024 still presented challenges in the form of limited new-to-market activity, office footprint downsizes, and rising vacancy.

Although this quarter marked the 19th consecutive quarter of negative net absorption, Portland’s office market observed only moderate negative absorption in Q4 2024. This, combined with the lack of incoming new construction, suggests the market may be moving towards stability. 

More move-outs are anticipated in coming quarters, which could drive vacancy if demand doesn’t pick up to match supply as more office leases are anticipated to expire in coming years. Leasing professionals expect tenants to continue right-sizing their office footprints. However, “right-sizing” doesn’t always mean downsizing – there have been numerous examples of office tenants expanding in the Portland market after an earlier aggressive downsize.

Rental rates were largely static throughout 2024, rising 34 basis points (bps) Year-over-Year (YoY) despite falling slightly since Q3. Class A rates held the overall average up; class B rates began to reflect discounted pricing offered by some landlords, falling 91 bps to $28.18 YoY.