Recent months have brought a significant increase in the price per square foot value for suburban office buildings under 10,000 square feet in a number of SW Portland neighborhoods, with the most dramatic impact in the Tigard and Lake Oswego submarkets.
In 2019 and 2020, office buildings smaller than 10,000 square feet in the Tigard and Lake Oswego submarkets have sold for under $330 per square foot.
As far back as April of 2021, building sales have clocked in over $500 per square foot.
While these buildings have always had a healthy demand, we've recently witnessed even more owners considering moving out of the urban core. This phenomenon is due to the changes to personal and corporate taxes in Multnomah County and the City of Portland, other lingering impacts of COVID, and the civil unrest downtown.
Interest rates remain at all-time lows allowing existing businesses in the area to own their building and control their occupancy costs rather than continuing to be subject to rental increases – especially in the suburbs.
The value of any building can fluctuate depending on several factors: its proximity to amenities, the abundance of onsite parking, access to freeways, and the age and functionality of the building and improvements. Therefore, a Broker's Opinion of Value can provide insights into the market value of a building to prepare for sale, or a survey of available properties and initial underwriting can be performed for a business owner looking to purchase a building to locate their company.