Wednesday, January 19, 2022
Jan. 19, 2022

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Commercial real estate market a mixed bag in Clark County

Industrial space in hot demand while retail, office leasing weaker

By , Columbian Business Reporter

The residential real estate market has been well-documented as being pretty intense in Clark County lately. But what about commercial properties?

“For industrial, there’s no supply on the market. You generally don’t see lease rates climb there, but now you’re seeing it happen,” said Brett Irons at Vancouver brokers Eric Fuller & Associates.

“Office is a completely different deal. We’ve got an oversupply on the market right now,” he said.

Several commercial brokers agree it’s a great time to be an industrial owner and a bad time to be an industrial tenant.

“The small spaces started stepping up about two years ago and continue to have a strong market,” said Terry Phillips of The Phillips Group real estate in Vancouver. “I think a lot of that (industrial building) is contractors, due to a lot of construction of single family homes.”

Industrial space has quickly turned from a buyer’s to a seller’s market, Phillips added, though quite the opposite is happening with office space, especially in downtown Vancouver.

“Anything with 2,000 square feet and up seems to have a hard time leasing,” he said. “Anything under seems to get soaked up.”

Irons said that means the time is right for those looking for bigger office spaces.

“Anything 5,000 square feet or greater is prime for the picking,” he said. “They should be taking advantage of the supply right now.”

Retail leasing is a different proposition altogether, as it operates on a different set of supply and demand principles than industrial and office markets and usually requires residential density.

For retail, “Salmon Creek is always hot, and out east certainly,” said Steve Mack at Coldwell Banker Commercial, referring to fast-growing parts of the county.

Irons said that overall, “retail is going strong. There have been ‘flights of quality’ — a lot of tenants looking to improve their image, move to a ‘class A’ location.”

Phillips said much of that is happening along commercial corridors like Southeast 164th and 192nd avenues and Northeast 134th and 63rd streets.

“It’s a mixed bag there, with some new stuff that have potential tenants before they’re even built,” he said. “That’s slowly beginning to infill in terms of occupied space and what’s available. It’s a normal process.”

Downtown is continuing its renaissance even as the city continues its sprawl. Growth, the experts say, has been spotty, however.

“Downtown has always been a puzzle to me, because downtown Portland just thrives,” Mack said. “It’s just an anomaly. Mill Plain is by far the best (retail corridor), Fourth Plain is picking back up — it’s undergoing some renewed interest.”

All that could be due in part to the eternal traffic jam over the Interstate 5 Bridge, Mack said, keeping people from saving on sales tax.

“I think retail in Vancouver is going to improve just based on the difficulty of getting to Portland anymore.”

Columbian Business Reporter