Portland Industrial Market Update: Vacancy, Vancouver Growth & The 2027 Outlook

Portland’s industrial real estate market has changed significantly from the post-COVID boom, with vacancy rising, tenants gaining leverage, development slowing, and Southwest Washington emerging as one of the region’s strongest submarkets. Join hosts Bill Condon and Kyle Back as they sit down with Tom Knecht of Colliers Portland to break down the current state of the Portland industrial market and what could be ahead heading into 2027. 🏢📈 In this episode, Tom explains how Portland has shifted from roughly 3.5% vacancy five years ago to around 8% today, creating a much different leasing environment for landlords, tenants, developers, and investors. After several years of rapid rent growth and extremely tight supply, the market is beginning to normalize toward more traditional levels of leasing activity, absorption, and rental rates. 📊🏭 The group also discusses why today’s market is giving tenants more leverage. With additional space available and wider differences between Class A and Class B/C properties, landlords are having to become more creative and accommodating to compete for deals. At the same time, Tom is beginning to see more tenants return to the market across industrial outdoor storage, big-box facilities, and Portland’s traditional middle-bay segment. 🤝📦 Southwest Washington is another major focus of the conversation. Tom explains why Vancouver and surrounding Clark County markets continue to attract occupiers through a combination of favorable taxes, access to the Portland metro, labor availability, and new Class A development. For companies evaluating Portland versus Vancouver, taxes, rental rates, land basis, proximity to customers, and supplier networks can all play a major role in site-selection decisions. 🌉📍 The conversation also looks farther north and south along the I-5 corridor, including Ridgefield, Woodland, Kelso, Centralia, and other emerging industrial locations. Tom discusses how limited land availability, development-friendly jurisdictions, and access to major population centers are pushing industrial development farther outside traditional Portland submarkets. 🚚🛣️ On the capital markets side, Tom explains why Portland continues to face perception challenges with some institutional investors. While certain capital sources remain hesitant to enter the market, buyers willing to invest in Portland can face less competition and potentially find attractive basis opportunities supported by the region’s underlying industrial fundamentals. 💰🏢 The episode wraps with Tom’s outlook for the rest of 2026 and into 2027. With speculative construction slowing significantly and very few new projects beginning, Portland may not need booming demand to move closer to equilibrium. As existing supply is absorbed and leasing activity continues to return, Tom explains why he remains cautiously optimistic about the market heading into next year. 📈✅ Chapters 00:00 Portland Perception Check 00:36 Podcast Intro and Guest 01:19 Tom Knecht Background 01:56 Market Today vs Past 03:13 Leasing Momentum and Sizes 04:38 Capital Markets and Investors 05:57 Submarkets Driving Rents 07:34 Business Climate and Taxes 09:38 Choosing Portland vs Vancouver 11:00 I-5 Corridor Development 14:03 Outlook Through 2027 16:14 Optimism and Wrap Up Make sure to subscribe to the Industrial Advisors podcast for more weekly insights into industrial real estate, corporate occupiers, logistics, development, capital markets, tenant representation, and supply chain strategy. 🔔 #industrialrealestate #commercialrealestate #Portland #PortlandOregon #VancouverWA #industrialadvisors #industrialleasing #industrialdevelopment #tenantrepresentation #capitalmarkets #commercialproperty #supplychain #logistics #warehousing #Colliers #industrialmarket 📢 Connect with us: Industrial Advisors Website: https://www.industrialadvisors.com/ LinkedIn:   / industrial-advisors-podcast   TikTok:   / industrialadvisorspod