Average Rental Rate
12-Month Rent Growth
SF Under Construction
Tigard's southwest location affords it proximity to office hubs like Kruse Way and Beaverton. While large employers have historically favored other parts of the metro—and despite lacking a substantial amount of premier tenants—Tigard has drawn increasing interest from investors and owners targeting assets as value-add plays or owner use.
Trailing 12-month net absorption is still underperforming, at approximately 32,000 SF, especially considering available sublet space remains at 150,000 SF. Tenants will likely continue to sort out space needs, but a light delivery schedule and limited supply pressure may help to mitigate these effects. Submarket vacancies of 11.9% are in-line with Portland's average of 12.3%.
Developers had already been relatively dormant here in the past decade, with a scant 38,000 SF of product delivered in the last ten years. Below average absorption in recent quarters won't likely be an ignition for any major speculative builds, either. Nonetheless, a major project may be in the works. The Trailhead, a 4 Star campus, would bring over 200,000 SF to market if plans eventually move forward.
Tigard's largest office tenants include, but are not limited to Allstate Insurance Company, occupying around 40,000 SF, and U.S. Bank Equipment Finance, with about 42,000 SF. Allstate will share space in the Bridgeport Center with Unitus Community Credit Union, who recently purchased the asset for its new suburban headquarters. In addition, Comcast has occupied 87,000 SF at a 2 Star data center off SW 68th Parkway for around a decade. In 18Q1, Farmers Insurance took possession of 40,000 SF at 6600 SW Hampton Street, but the space has now been up for sublease for around a year.
Office rents in Tigard run for about $28.00/SF gross, which is more or less in line with the metro average. The same is true for 3 Star space, the submarket's most prominent office slice, which at $29.00/SF is right in line with the metro average for that slice
Rents in the submarket grew by 3.3% year over year as of 2023Q2, and though positive, it was lower than the 5.1% annualized average over the past three years.
No significant leasing activity was reported this quarter.