Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.
Issue link: https://westernrealestatebusiness.epubxp.com/i/732258
www.REBusinessOnline.com Western Real Estate Business • October 2016 • 7 T he changing habits of business have pressured industrial markets around the U.S. to sprint toward designing spaces for their customers' changing ware- house needs. Among those markets is Port- land, Ore., which is making a surging effort to welcome e-commerce distributors with open arms. Direct-to-consumer businesses are shifting real estate development — and supply chains in their entirety — to require nimble distribution centers capable of com- peting in the markets of tomorrow. The race for warehouse functions to become bigger, more flexible and more efficient is blossoming in the Rose City — and the region is already seeing significant effects. Portland's industrial sector has tightened as record-breaking developments chase surg- ing population growth, declining industrial vacancy rates and major distributors absorb- ing record market space. Metro Portland has squeezed, on average, 111 new residents into the city limits each day between 2014 and 2015, according to census statistics. With its 1.9 percent annual growth rate, Portland has jumped in ranks to the 26th largest city in the country, which is two spots higher than the previous year. The growth is organic, too. Oregon was the top moving destination in 2015 for the third year in a row, according to a study of 123,000 moves from United Van Lines. Almost 70 percent of the interstate moves in Oregon involved people moving to the state. When People Move in, So, Too, Do Businesses Major retailers and expanding local brands are absorbing all that Portland has to of- fer. UPS, Subaru, Amazon, LKQ and KeHE Foods are some of the biggest and newest names to absorb major industrial space in the region within the past 12 months. With that absorption came the need to build. About 2.4 million square feet of industrial space was reported to be under construction at the end of the second quarter of 2016. Pa- cific Northwest-native brands like Charlie's Produce and Bob's Red Mill are expanding their local footprints as well. With consum- ers demanding faster shipping times and Amazon remaining bullish on same-day delivery, e-commerce companies need to be closer to customers and possess versatile dis- tribution centers to satisfy demand. Portland offers both. The demand for more reliable shipping times has spurred companies to fixate on "last-mile" or "final-mile" delivery, which is becoming a prioritized aspect of supply chains. Companies are adding speedy and reliable delivery to their value proposition and are in need of a presence near emerging population centers. A Portland location gives distribution centers a strategic edge to reach the growing Pacific Northwest. Portland continues to be on the radar as a regional distribution location for Corporate America. We are still a good value for cost in comparison to our neighbors to the north in Washington, as well as to the California dis- tribution center alternatives. THE ROSE CITY RUSH FOR INDUSTRIAL REAL ESTATE The rise in e-commerce, a prime location and reasonable prices have made Portland a desirable market for industrial players. By Don Ossey and Dave Ellis Ossey Ellis Talk to our Economic Development Manager, Catherine Ralston, about joining the Redwood City Community 650-780-7204 or cralston@redwoodcity.org Celebrating our Past WELCOMING OUR FUTURE continued on page 41