Businesses turn their interests into suburban markets for more space and to be closer to their employees.
In the third quarter of 2020, the amount of office space in Portland has increased compared with the previous quarter as a result of the pandemic, causing companies to reevaluate the location and space they need for their employees. In the second quarter, total office space has increased from 15.5 percent to 17 percent; The commercial real estate firm says that although this dip is abnormal, it has grown due to more companies subleasing their office space or not renewing leases.
The nature of office work has been influenced completely by the COVID-19 pandemic, with many employees working from home and fewer workers going into the office due to social-distancing requirements. Some businesses have chosen to get rid of the office altogether, resulting in all employees working from home.
“The trend has profound implications for Portland downtown businesses that rely on foot traffic from office workers, such as restaurants and retailers, and hotels that rely on business travelers” (Moore, 4).
The pandemic draws more attention to the suburban market for offices, leading to a renaissance of suburban-office markets. The vacancy rate for office space in the suburbs was 10.7% in the third quarter, virtually unchanged from the previous quarter – this includes Beaverton, Hillsboro, Clackamas, and Tualatin.
The trending increased interest in the suburban market has stood out for tenants interested in more space and being closer to their employees.
Although downtown had the largest increase in vacancy rates, the three biggest deals of the third quarter were located in the downtown area.
Tenants have leaned towards flexible or short-term leases due to the uncertainty that comes with the coronavirus and how the office market will adapt.
This blog post was written by Krista Pham, our intern.
The article that inspired this piece can be found, here.