Average Rental Rate
12-Month Rent Growth
SF Under Construction
Kruse Way is home to Shorenstein Companies' Kruse Woods Corporate Park, a 1.8-million-SF office complex that makes up around 50% of the submarket's inventory. The park houses several of the largest office tenants in Kruse Way, including locally headquartered Logical Position and global software company NAVEX Global. The Greenbrier Companies – a publicly traded freight manufacturer – also occupies 57,000 SF within the submarket at Centerpointe.
Vacancies were significantly above the metro rate even prior to the COVID-19 outbreak. Net absorption yearover- year amounts to -150,000 SF. As a result, vacancies sit at 26.4%, reflecting a 5.3% change over the past year. Metro vacancies, by comparison, come in at 12.3%.
Barriers to supply expansions exist, however, given significant greenspace and parks nearby, along with established affluent residential neighborhoods. Thus, inventory pressures should be minimal in the near term, and this could serve to cushion the blow of tenant decommittments on space.
Average asking rent of $37.00/SF is noticeably higher than Portland's average rate of $29.00/SF, thanks to the high proportion of 4 & 5 Star assets. This likely accounts for why rent growth has generally outpaced metro performance over the past few quarters. Trailing year gains equate to 2.8%, compared with the metro performance of 1.6%.
Office rents in Kruse Way run for about $37.00/SF gross, which is considerably above the metro average. The submarket's most prominent office slice commands a premium as well, albeit somewhat less pronounced. Space rated 4 & 5 Star here runs for about $40.00/SF, compared to $35.00/SF in the metro.
Rents in the submarket grew by 2.8% year over year as of 2023Q2, and though positive, it was lower than the 5.4% annualized average over the past three years.
No significant leasing activity was reported this quarter.