Using growth in value as the factor, the Integra Viewpoint 2001 report ranks Portland as the No. 4 city for investment in retail properties behind Seattle, Houston and San Diego. As for industrial investment, the city ranks No. 10, ahead of such high-growth cities as Atlanta and Los Angeles.

Ironically, the study shows its Portland's Downtown office market that has seen the most explosive growth in value over the past three years. Between 1997 and 2000, Downtown office values has risen 29%, while suburban office space increased in value by 21%, industrial properties by 23% and retail by 18.8%.

"Although the nation as a whole has suffered from the economic fluctuations of the past year, Portland and the West Coast are generally doing a good job of weathering the storm," says Gerald Curtis, managing director of the Portland office of Integra Realty Resources. "Despite the economic storm clouds seen by many on the horizon, Portland real estate will continue to do well."

In the report, Portland was listed as having a 6.2% retail property vacancy rate in 2000, with a 4.3% vacancy rate in shopping malls during the same year. The strong showing has a lot to do with urban growth boundaries and the lack of a sales tax, which draws lots of shoppers from southwest Washington.

Looking forward, there is about 2.3 million sf of retail planned to come online between now and the end of 2003. Over the past three years, the region absorbed just under 1 million sf, which means some weakening may be on the way, but not enough to fret over, says Curtis. "Per capita, we have a pretty high retail square footage," Curtis explains. "Nevertheless, compared to other parts of the country, we're in relatively good shape."

Portland's industrial vacancy was listed as 6.1% for the year 2000, according to the report, which predicts that industrial values will rise by an additional 8% through 2003."Industrial has been strong because of our chip manufacturing construction, as well as expansion into the area by both regional and national firms," he says. "We've had a tremendous growth in industrial real estate."

Going forward, Curtis says the vacancy rate is now closer to 8%, with some 3 million sf in the pipeline to be added to an existing base of 94 million sf between now and the end of 2003, depending on the market. Between 1997 and the end of 2000, the region absorbed slightly more than that, which bodes well, says Curtis.

Although the Portland Downtown office investment market did not make Integra's list of Top 10 markets--Denver, Boston and Orange County were the top three--Portland is nonetheless among the healthiest in the country. "Steady leasing activity, combined with limited additions of office inventory, has kept the vacancy rate for all building classes in all locations relatively low," Curtis says, noting that in the most recent quarter, the office vacancy rate stood at a moderate 7.9%.

What is particularly impressive about the class A vacancy rates, says Curtis, is that it reflects the near complete lease-up of the ODS and Fox Towers, the most recently completed central business district class A office towers. "Effective and face rental rates increased substantially during 1997 through 1999, and seem to have stabilized at those levels at the end of 2000," he says, adding that free rent or above-standard tenant improvements are uncommon or minimal.

Looking ahead, the Integra report lists eight office projects in the central city totaling 1.2 million sf that are likely to be completed between now and the end of 2003. Almost all of it is planned to hit the market in 2002 and 2003, however, which should give the market some time to catch its breath and backfill spaces vacated in favor of the ODS and Fox Tower office buildings.

Overall, the Portland real estate market is pretty well positioned to survive any economic bumps in the road, says Curtis. "The West Coast is a little more fortunate than some parts of the country in that we have our link to the Asian markets and we have a lot of cross-sections of industry and business that are in the area," says Curtis. "So we're suffering a little bit with the rest of the country, but I think the West Coast will fare better than perhaps some other parts of the country."