Portland Offices Pivot to Mid-Term Rentals for Yield Boost
Vacancy Rates Drive Landlords Toward Flexible Lease Strategies Portland's office market is entering uncharted territory, as vacancy rates reach unprecedented highs. Landlords are now shifting from traditional leasing models to more flexible strategies out of necessity. Overall, the vacancy rates have soared to 24.9% in Q1 2025, a year-over-year increase of 350 basis points. Downtown properties are struggling with catastrophic vacancy rates of 33.8%, while suburban areas show slightly better rates at 15.9%. Rising office vacancies, especially in downtown Chicago, mirror occupancy challenges faced in Portland, emphasizing the need for new leasing strategies. Direct vacancy rates have hit a record 14.0%. This marks ten consecutive quarters of increases. Moreover, Greater Portland's direct vacancy increased from 7% to 8.15%, the highest since 2013. The market has suffered six straight quarters of negative net absorption. Q1 2025 alone saw a loss of 422,000 square feet, prompting p...