Average Rental Rate
12-Month Rent Growth
SF Under Construction
Airport Way is home to the Portland International Airport and the Port of Portland's Air Cargo Facilities. It is bound by the Columbia River to the north, NE Columbia Boulevard to the south, I-5 to the west, and NE 122nd Avenue to the east. The presence of the airport and the Union Pacific and BNSF railways are attractive to logistics firms, particularly those dealing in the shipping of high-value or heavier components.
Long-term projects include the Portland International Center, a 458-acre logistics and retail master-planned business park. It borders both the airport and I-205 in the middle of a state enterprise zone, where participating industrial firms can receive up to five years in property tax exemptions. The boundaries for this zone were established in July 2012, terminating in June 2024.
Historically, demand has generally been more than enough to accomodate new supply, given the submarket's access to key logistics nodes. Large investors are increasingly active here, with the occasional asset wrapped into a larger portfolio deal.
Market asking rents of $10.60/SF are a notch below Portland's overall average of $11.30/SF, but annual rent growth of 6.0% year-over-year tracks above historical metro performance of 3.9%. Given a relatively light pipeline by historical standards, this trend should continue in 2023.
Over the past decade, Airport Way's rent growth has been robust, with a cumulative increase of 73.5%. It is notable that rent growth in Airport Way outpaced metro performance in that time, even in the face of major supply pressures.
Speculative construction and a handful of move-outs drove vacancy pressures in Airport Way from late 2015 until mid-2021. However, despite the volatility, local vacancies haven't strayed beyond 10% in the last decade, with the current figure sitting at 2.9% as of 2023Q2.
In recent leasing, Wagner Logistics and Thyssenkrupp Materials took over 160,000 SF combined at the Bridge Point I-5 facility in Building A during 22Q4. These leases support the notion that the area remains one of the most desirable logistics hubs in Portland.
On a larger scale, an 818,000-SF distribution center makes the United States Postal Service the submarket's largest tenant. Competitor UPS occupies 235,000 SF, while FedEx occupies well over 500,000 SF after its latest lease at Bridge Point I-5 in Building B. Amazon occupies 150,000 SF at 1001 N Schmeer Rd.
Other notable tenants include Owens-Illinois, Inc., a glass container manufacturer and owner/occupant of 491,000 SF. Food distributor KeHe occupies 383,000 SF at PDX Logistics Center.