Sperry Van Ness International Corporation’s (SVNIC) 2015 Market Update Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2015. Today we are delving into the 2015 Top Multifamily Markets to Watch. Not the largest or the most actively contested markets, the 2015 Multifamily Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.
Top Multifamily Market to Watch: Portland, OR
Portland has established itself as a magnet for Millennial households, which in turn has contributed to its very tight rental market. About 7,000 units were delivered in 2014. Still, the multifamily vacancy rate in Portland ended the year at less than 3%. While Freddie Mac expects additional deliveries in 2015 to push vacancy rates up, the agency additionally projects a 3.8% increase in rental rates. Oregon’s land-use restrictions ensure that construction is overwhelmingly in-fill, which fits the Millennial preference for urban living.
The economic and labor market drivers of apartment demand in the Portland area are robust. Among last year’s milestones, November 2014 saw the single largest monthly job growth for Portland since 1990. Intel, which just negotiated a 30-year tax break in exchange for an extraordinary $100 billion investment in semiconductor equipment and facilities at its Hillsboro campus, anchors the high-tech industry in Portland, while Nike received final approvals to expand its Beaverton campus in order to accommodate the addition of 2,100 jobs. German solar panel producer, SolarWorldAG, is set to expand its Hillsboro facility, adding 200 jobs. Small- and medium-sized businesses are flourishing as well, with 57% of the Inc. 5000 list of fastest growing companies calling Portland home.
To read more on Portland and other top multifamily markets, download the full version of the 2015 Multifamily Market Update report here.
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