WESTERN SNAPSHOT, JANUARY 2005

Portland, Oregon Retail Market

Portland, Oregon’s retail market has always been restricted due to its urban growth boundary, which makes finding great sites to complete larger developments challenging. On the other hand, the polygon-shaped zone covering the city offers a significant and protective barrier to entry for those retail developers who do find a substantial development opportunity in the City of Roses.

The most prominent example of this is Opus Northwest and Center Oak Properties’ Bridgeport Village, a $125 million, 505,000-square-foot lifestyle center located at Interstate 5 and Lower Boones Ferry Road in the southern Portland suburb of Tualatin. “It is perhaps the best of all the sites,” say Jim Dix and Candace Gray, principals at Gray & Associates in Portland. “The development is surrounded by the market’s highest demographics including the communities of West Linn, Lake Oswego, Dunthorpe, Stafford and Sherwood.”

Bridgeport Village, which opens in May, is anchored by an 18-screen Regal Cinemas, a 36,000-square-foot Crate & Barrel and a 32,000-square-foot Wild Oats Natural Marketplace. Other feature tenants include The Container Store, Borders Books & Music, Banana Republic, J. Jill, Coldwater Creek, Coach and Ann Taylor Loft. “This is an upscale lifestyle center housing many first-in-the-market tenants including Crate & Barrel, which has opened already (the only tenant to do so) and continues to set company sales records,” say Dix and Gray. Restaurants at Bridgeport Village will include P.F. Chang’s China Bistro, California Pizza Kitchen, McCormick & Schmick’s Seafood Grill, Romano’s Macaroni Grill and Johnny Rockets.

To the west of Portland, in Hillsboro, The Shops at Tanasbourne, developed by Ohio-based Continental Real Estate Companies, offers nearly 400,000 square feet of lifestyle retail. Anchored by a two-story, 160,000-square-foot Meier & Frank, the $75 million center features specialty tenants such as REI, Gymboree, Mimi Maternity, Coldwater Creek, J. Jill, Banana Republic, Gap, Gap Kids, Limited, Express, Abercrombie & Fitch, Hollister, Limited Too, Lane Bryant and Pac Sun. The Shops at Tanasbourne opened last October.

Dix and Gray also point toward NW 23rd Avenue as an area of significant development in Portland, offering “hip and trendy street retail.” Most of the real estate is owned by the Singer Family, which has introduced many first-in-the-market retailers including Williams-Sonoma Home, Lush and Kiehl’s.

Given the two large lifestyle centers mentioned above, Portland’s west and southwest submarkets are experiencing the majority of retail development. Oregon Pacific Development along with Continental Development, Opus Northwest, Center Oak Properties and The Singer Family are the most active developers in the market.

According to Trammell Crow Company, Portland’s retail vacancy as of third quarter was 8.4 percent. The average retail asking rent stood at $15.60.

— Jim Dix and Candace Gray are principals at Gray & Associates in Portland.

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