Portland Multifamily Rents and Occupancy Show Weakness
Fundamentals for multifamily in Portland are weak across the board, as investment activity remains a lone positive.
In the fourth quarter, occupancy slipped by 70 basis points from the previous three months to 94.6 percent, according to a market report from CBRE. The Central Portland submarket registered the highest vacancy rate, at 7.1 percent, followed by East Portland at 6.3 percent. The lowest was in East Beaverton, at 4.4 percent.
Rental rates also experience weakness, dropping 2.6 percent from the third quarter to $1,730. On a year-over-year basis, rents are only down by 1.5 percent.
Also, demand was weak, with net absorption at -1,201 units. That comes on the heels of 591 deliveries, which is nearly cut in half from the total posted in the third quarter.
Meanwhile, transactional activity headlines the positives seen in the fourth quarter for multifamily in Portland. Investment sales increased to $496 million on 1,983 deals compared with the previous three months' $484.6 million. The average sales price in the fourth quarter came out to $250,231.
The largest deal involved the 235-unit Clay Tower, which traded hands for $50.40 million. Hollis and Holmes Park were the next largest to sell, going for $31 million and $23.13 million, respectively. Rounding out the top five were East Wind Apartments and Lower Burnside Lofts, which sold for $20.50 million and $14 million, respectively.
Some other positive notes for multifamily in Portland: It's 132 percent cheaper to rent, with the monthly cost of homeownership coming out to $4,014.
Also, net migration was 2,160 to take the Portland MSA population to 2.55 million.
Source: GlobeSt/ALM