By Jack Stubbs
Portland’s multifamily market has slowed down in recent months, according to Colliers’ recently released third quarter multifamily market report, with several economic metrics indicating relatively decreased demand in the marketplace.
There were several key findings from the report demonstrating as much. The market-wide occupancy rate continues to hover around 96 percent, marking a 1.2 percent decrease year-over-year. This follows seven consecutive quarters of occupancy growth since fourth quarter 2022. Due to economic factors, third quarter sales volume also fell 58 percent year-over-year, with the quarter witnessing only 59 transactions – compared to 78 and 97 transactions in quarters one and two, respectively.
Notably, however, rents grew 10.9 percent, which extends the trend of positive year-on-year rent growth to seven consecutive quarters,
The East Portland, Southeast Portland and Vancouver submarkets remain key areas of focus for new construction. Vancouver, in particular, has drawn significant interest from developers: its 2,300 units under construction represent nearly seven percent of the total submarket inventory.
Overall, the third quarter saw 717 new units delivered, compared to 345 units delivered in the second quarter and 1,512 new units delivered in the third quarter 2021.
There were several transactions of note in the third quarter, some of which included LaSalle Investment Management’s purchase of the 187-unit Oak Street Lofts in the Southwest Portland/Tigard submarket for $81.5 million, or $435,829 per unit, from Abacus Capital Group; and MJW Investments, Inc.’s acquisition of the 124-unit 134th Street Lofts in the Vancouver submarket for $38.75 million, or $312,500 per unit, from iCap Enterprises, Inc.
As The Registry reported in late October, Southern California-based SR Watt Company announced the $60 million acquisition of a two-building multifamily portfolio comprising two Class A suburban Portland assets from Madison Park Financial Corp., who was represented by JLL Capital Markets Investment Group.
The two properties included in the transaction were the 101-unit Cannery Row at 22550 SW Highland Drive in Sherwood, and the 87-unit Westline at 4545 SW Angel Ave. in Beaverton.
Looking ahead, there are a handful of multifamily properties slated for delivery by the end of this year and early next. Some of these include Paul Properties LLC’s The Pearl, a 58-unit property located at 1315 NW Johnson St. in Central Portland, and WDC Properties’ Candlelight, an 80-unit property located at 51539 SE 2nd St. in Northwest Portland – both of which are scheduled for delivery in the fourth quarter 2022. Elsewhere, Pahlisch Commercial’s Timberview, located at 19896 S Beavercreek Road and comprising 180 units in Southeast Portland, is expected to deliver in the first quarter of 2023.
Seattle-based Security Properties has also recently played an active role in a couple of in-the-works apartment projects in Portland. In late October, the company announced that the second phase of construction had begun for Press Blocks development in Portland’s Goose Hollow neighborhood, to which developer Urban Renaissance Group is also contributing.
Designed by Mithun and taking up an entire city block in two structures, the second phase of the Press Blocks comprises a 24-story high-rise that will deliver 341 apartments, and a three-story commercial building that includes retail, live-work units, and creative office for a total of more than 30,000 square feet of commercial space.
Also in late October, Security Properties announced the commencement of construction for the 219-unit Splash Apartments located at NE 27th Avenue and Sandy Boulevard, which is also designed by Mithun.