Portland-based Puppet, an automation software solutions company, is looking to reduce its footprint in the downtown property where its headquarters are based. After its acquisition earlier this year by Minneapolis-based Perforce Software, Puppet is looking to put roughly 75,000 square feet it occupies in the Block 300 building on the sublease market, adding to the city’s growing glut of available space.
The sublease was first reported by the Portland Business Journal.
To help market the sublease space at 308 S.W. Second Ave., the company has hired CBRE. The portion of the office that will be available for sublease includes the fifth and sixth floors of the building. Overall, the 1991 vintage property is roughly 362,000 square feet in size.
Puppet’s change of space needs comes as a result of two major shifts in the company’s operations. One is as a result of shifting worker habits and the need to adapt to a hybrid work environment that does not require the company to lease as much office space. The second driver of the change likely comes as a result of the April 2022 acquisition and redundancies that resulted from that, such as the consolidation of back office operations. In a statement referenced in the report, Perforce said, “Following an evaluation of operations, Perforce completed a reorganization of its recently acquired Puppet division to balance operational efficiencies with continued innovation and position the company for continued growth.”
According to a recent, 2nd quarter of 2022 Portland Office Market Report by brokerage firm Kidder Mathews, vacancies in the market continued to increase during the second quarter. Downtown Portland posted a direct vacancy rate of 19.9 percent while the combined suburban market was at 8.1 percent, according to the report.
Even with these figures, the average asking lease rate managed to climb to $28.43 per square foot full service, a 1.5 bump from the same time last year. However, landlords are starting to feel the pressure from the market dynamics and have begun to offer concessions to attract tenants, the report stated.
Kidder Mathews sees that office tenants will continue to give back space in the near term as they continue to navigate the delicate balance of on-site, remote and hybrid employees and the overall impact of space requirements. This will be especially acute in the Downtown submarket, while the suburban markets will continue to outperform with employee proximity and amenities playing a major role in occupancy drivers.
