Portland Apartment Market Swings Toward Owners

PORTLAND-The Portland apartment market is back in equilibrium, says the latest report by Cushman & Wakefield Financial Services. The division’s June Market Beat report says vacancy rates have dropped for the first time since the mid-1990s and rents for 2001 are expected to rise after nearly two years of remaining relatively flat.

As a result, after flooding the market with 32,000 new units between 1992 and 2000, Portland is once again becoming more attractive to multifamily investors and developers. Backing that up was this week’s news about Pacific Property Company agreeing to acquire the 156-unit Panorama West Apartments in Tigard, OR for $6.15 million, and putting out word it is looking for more.

Back to the forecast, multifamily completions are predicted to total 10,914 units between 2000 and 2002 in the Portland-Vancouver Metro area, with an average annual absorption of 3,940 units, according to the report. If the scenario holds true, vacancies would drop from 7.1% in 2000 to 5.5% by 2002, while rents would rise 3.1% in 2001 (to $685 per month) and another 3.5% in 2002. Sales prices, which dropped by 8.57% in 2000 to an average of $54,247 per unit from $59,988 per unit in 1999, are expected to rise 3.5% in 2001, according to the report.

On the general economic front, Oregon’s Office of Economic Analysis forecast calls for Oregon to outperform the US with growth of 1.4% in 2001 and 2.1% in 2002, according to the report. The Portland metropolitan area, which typically outperforms the state as a whole, saw 1.1% job growth over the past year. The lone bright spot was electronics manufacturing, which grew by 11%. The services sector, a primary tenant of office space, generated only 6,800 additional jobs (2.4% growth) in 2000.