Panattoni Signs Landmark Lease in Metro Portland
This transaction is the largest of its kind in the area's history.
Owners Panattoni Development Co. and LaSalle Investment Management have signed a lease valued at $51 million for the entirety of the 681,780-square-foot Burnt Creek Logistics Center in Vancouver, Wash. An unnamed national grocer will occupy the property.
The deal means Panattoni’s bet on the Vancouver submarket of metro Portland, Ore., a project started about two years ago as the market for industrial properties seemed limitless, has paid off.
The single-building property, on more than 38 acres at 5920 NE 162nd Ave., was completed last year by Panattoni, which tasked Colliers’ Portland office with leasing the property, after that company had brokered the original land acquisition and participated in the development process. Colliers’ team includes Vice Chairman Jerry Matson, Senior Vice President Brian Yoakum and Vice President Tom Knecht.
The deal is the largest spec industrial lease-up in metro Portland history, according to the brokerage.
In fact, Colliers states, the structure is the largest spec industrial building ever built in metro Portland.
Burnt Creek Logistics Center includes a 40-foot clear height, 128 docks, and four grade-level doors, making it suited for large-scale logistics operations.
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The transaction underscores the future of Southwest Washington state as a logistics hub, Matson commented in a statement, with large industrial spaces still in demand. The only other recent industrial deal in the entire Portland market that comes close to Burnt Creek is Wymore Transfer’s lease of 516,000 square feet at the Wilsonville Distribution Center in the I-5 South submarket in the second quarter.
Metro Portland industrial cools
The Burnt Creek Logistics Center promises to impact the Greater Portland market’s industrial leasing numbers in the third quarter, but for now the leasing trend is one of negative absorption, which has gone on for four consecutive quarters—a year of tenants returning space to the market—according to Colliers data.
In the second quarter of 2024, negative absorption marketwise was 993,000 square feet in metro Portland, Colliers reported. So far this year, 1.5 million square feet have returned to the market, pushing vacancies up to 5.6 percent, which was the average rate between 2010 and 2019.
There is also a considerable amount of space still in the works, with 3.3 million square feet under construction during the second quarter of 2024—actually a little more than the 3.2 million square feet underway a year earlier, according to Colliers. Of the 1.1 million square feet delivered so far in 2024, two-thirds of it (66 percent) has been delivered vacant.
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