Average Rental Rate
12-Month Rent Growth
SF Under Construction
The Lloyd District is Portland's third-largest office submarket, but inventory count remains limited compared to the CBD and Sunset Corridor/Hillsboro. Aside from demolition, to bring significant spaces to market in a land-constrained urban area like Lloyd District, older structures—including former industrial buildings and functionally obsolescent properties—are being converted into creative office spaces. This is a popular option for startups in the Portland urban core. Submarket inventory has expanded by 6.5% in the last decade as a result.
In addition, Lloyd Center, once known as the premier shopping mall in Portland, was repossessed by creditors. Multiple external factors led to falling foot traffic and previous ownership struggled to meet debt obligations. Plans haven't been finalized, but current talks for the mall include partial demolition and reconfiguration to office and residential uses.
While other submarkets like Tigard and SE Close-In have seen a heavier construction load recently and could eventually supplant the Lloyd District's inventory total in the coming years, development activity in the Lloyd District hasn't totally stalled.
Adjacent submarkets such as Gateway and NE Close-In are home to major medical operations such as Providence Portland Medical Center and Legacy Emanuel Medical Center. The presence has led developers to pursue more medical office projects in recent quarters. Security Properties has started work on the Pavilion on Sandy, a multi-phase medical office and apartment project located at the former Pepsi distribution center at Sandy Boulevard and 27th Avenue. The first phase is planned for a late 2023 completion.
Office rents in Lloyd District run for about $32.00/SF gross, which is moderately above the metro average.The same is true for 4 & 5 Star space, the submarket's most prominent office slice, which at $37.00/SF rents for more than the $35.00/SF metro average for that slice.
Rents in the submarket grew by a moderate 1.4% year over year as of 2023Q2, which was about the same as the annualized average growth rate over the past three years
No significant leasing activity was reported this quarter.