The southwest Portland suburb of Tualatin is located near the I-5 and I-205 junction. Once a light industrial manufacturing submarket, it has transformed into a major industrial node within the metro. Inventory has ballooned by 19.0% over the last decade, with approximately 2.0 million SF delivered. Currently, there is approximately 130,000 SF of industrial product underway, set to expand existing inventory by another 1.5%.

The Myslony Industrial Park delivered two modern logistics buildings in 22Q4. California-based Phelan Development oversaw the project. Aside from Myslony, the only other recent project was the 73,000-SF 11501 SW Amu St. delivered in 2020, fully preleased, but with approximately 18,000 SF available for sublease.

Throughout the past decade, Tualatin's vacancy rate has periodically exceeded the metro average due to the submarket's relatively busy development schedule. However, heavy leasing in recent quarters — driven by affordable rental rates and Tualatin's strategic location — has led to compressed vacancies of 1.0%. The larger metro rate currently equates to 5.7%. Trailing 12-month net absorption equates to 470,000 SF, versus the three- year average of 250,000 SF.

Increasing demand for space has subsequently pushed rents higher. Year-over-year rent growth turned in gains of 5.9%, compared with metro gains of 5.8% over the same period. Yet, submarket rents of $10.10/SF are still a discount from the metro average of $11.30/SF.