2016 saw the addition of 2.3 million square feet of new industrial space in the Portland Metro region, slightly less than was added in 2015 but otherwise the largest annual growth since before the Great Recession. But that was not enough to meet demand, which outpaced supply by almost 50% in 2016. New, large industrial tenants include Amazon, which by the end of 2018 will have over 1.1 million square feet of industrial space leased in the Metro area. Vacancy rates fell to 3.5% (a 15-year low) and rents are up 16% year-over-year.
Another 2 million square feet is expected in 2017, including about 1.2 million square feet at the Port of Portland's Gresham Vista Business Park alone. Gresham Vista is familiar to Mt. Hood day trippers who previously used to pass a long stretch of flat, vacant land on NE 238th on their way to the slopes. Today, the site hosts an immense Subaru distribution center and will soon be home to many more industrial users eager to take advantage of Portland's growing population and steady economy.
As long as the end users aren't too dirty, industrial projects are favored by local governments because they generate more in tax revenue than they use in services, and provide lots of good-paying jobs. Industrial-sector jobs paid on average 42% more than local-sector jobs in Portland in 2014, and each high-skill industrial job created an average of 2.5 local-sector jobs as the economic benefits of industrial investment rippled through the economy.
Still, having enough available industrial land has long been a challenge for planners in Portland and throughout the state. Size and location are key issues for industrial users, and Oregon has suffered from a lack of large, contiguous industrial sites near transportation corridors. Thus, much of the industrial land that has come available was taken by commercial users who needed less space, and efforts to discourage this with land use regulation have met with mixed success. The recent uptick in large industrial sites should help bring some new major players to Portland, with positive effects throughout the region's economy.
