Q3 2021 Industrial Newsletter
October 28, 2021 - Company, Industrial
The Port of Portland has added a new container service to Terminal 6 to address critical supply chain constraints, which is a positive sign of increased demand for industrial real estate and labor in our region.
Amazon continues its massive expansion to secure large parcels of land ranging from 20-100 acres to build large warehouses (500,000 square feet or more) for last-mile distribution centers marketwide.
Commodity prices for steel, lumber, glass, and roofing materials have risen dramatically in the last 12 months, putting more pressure on builders and developers. In some cases, materials are not priced until they are delivered to the customer.
Businesses continue to look outside of Multnomah County for tax-friendly areas, leading to extreme demand and permitting delays in submarkets like Clackamas, Clark, and Washington Counties.
Although unlikely, possible modification to the 1031 tax-deferred exchange law is causing instability in the market.
Labor shortages continue to be a significant issue across all sectors. As federal benefits expire, an expected surge in labor has yet to surface, forcing many companies to increase wages and offer sign-on bonuses to attract new hires.
Supply chain issues combined with a lack of labor, ILWU labor disputes, and a shortage of container chassis are affecting major ports like Los Angeles and Long Beach. The Port of Portland may be the beneficiary of this congestion, increasing activity at Terminal 6.
Inflation is front and center in lease negotiations. The traditional 3% increase is slowly moving up to 4%. This is already prevalent in major markets (E.G. Seattle, Bay Area).
To see full statistics and learn more about the status of the Portland Metro industrial market, view our complete market update below.
LINK TO INDUSTRIAL MARKET UPDATE