The Eagle Creek fire isn't the only recent conflagration in east Multnomah County. The market for new industrial development in places like Troutdale and Gresham is en fuego also. Big new developments attracting hot employers to the region include the Port of Portland's Gresham Vista Business Park, portions of which are being developed by Trammell Crow and Specht. Specht also has the massive Vista Logistics Park under development in Gresham. And the Port and Trammell Crow are hard at work on the Troutdale Reynolds Industrial Park, on the site of the former Reynolds aluminum plant in Troutdale. Headlining the recent additions at Troutdale Reynolds is a 19.5-acre Amazon distribution center, which joins three other new Amazon facilities recently built or planned for Hillsboro, Salem, and Portland.
This growth spurt should not be surprising given that in 2016, only about two-thirds of the space needed for new industrial tenants in the Metro area came from new construction. That meant almost 1 million square feet of space had to be absorbed by existing facilities, which drove vacancies way down and rents way up. Hence the strong demand for new projects. Market analysts expect 2 million new square feet of space in 2017, most of it in the east Multnomah County submarket which has good road and rail access, abundant parking and proximity to retail amenities.
Even this massive surge of new space may not be enough. Demand is so high, pre-leasing before construction is common, which makes developments on spec more attractive. Lower-profile users priced out of Portland Metro by big users like Amazon are looking up and down I-5 at space coming online from Salem to Ridgefield, Washington.
For years, the lack of shovel-ready sites for large industrial users has been a popular target for those concerned about sluggish economic growth and a shortage of high-wage jobs. Hopefully, those critics will be proven correct and Portland will benefit from some robust job growth as these new properties are filled and open for business.
