Portland Multifamily Demand Falls to Two-Year Low
Demand continues to trend lower for multifamily in Portland, Oregon. Net absorption in the third quarter was 345, well below the 2,552 units posted in the same period 12 months ago, according to a market report from Colliers. Not only did that mark the third straight quarter of declines, but that was the lowest amount seen since the fourth quarter of 2023.
The weakest performances came from the Lake Oswego/Tualatin/Wilsonville and Aloha/West Beaverton submarkets, which negatively absorbed -53 and -52 units, respectively.
Also, sales and average price per unit dropped to $426 million and $161,000, respectively. These are both the lowest values posted in a year, according to Colliers.
"While in quarters past we have seen Institutional buyers add high-profile Portland assets to their national portfolios, Q3 was dominated by private or individual acquisitions," the CRE firm wrote.
"63% of units sold were purchased by private entities in Q3, while just 4 of the largest 10 transactions and 29% of units traded involved institutional buyers."
The largest transaction was JB Matteson's $26.46 million buy of 120-unit Prairie Home Apartments. ScanlanKemperBard Companies and Hayden H Watson Thomas Bahrman made the next biggest deals, with $23.5 million and $22.75 million buys, respectively.
While sales and demand were weak, there were some encouraging trends in Portland's multifamily sector. One being occupancy, which improved by 90 basis points year-over-year to 95.6 percent. And asking rents inched up by 0.8 percent to reach $1,782.
Moreover, supply trends were favorable, with deliveries falling to 543 units compared with 1,554 in the 12 months prior. And construction was cut from 6,617 to 2,619 units.
"Nearly half of the Portland metro’s 2,600 units under construction are in Vancouver, positioning the north suburb to capitalize on sustained hyperlocal demand and drive Portland’s multifamily growth through 2026," Colliers forecasts.
Colliers added to that prediction and noted that, given the dynamics in Central Portland, the overall market is set for a "steady recovery."
Source: GlobeSt/ALM