From Dick’s Sporting Goods at Washington Square to Mercantile-Portland in downtown, from Cascade Station in North Portland to Nyberg Woods in the I-5/Bridgeport Corridor, the retail scene has arrived in the Portland market.

Portland, long seen as a secondary retail area between San Francisco and Seattle, is now one of the most sought after markets in the country. With 2.15 million residents and population growth of 11.6% since 2000, Portland is the 29th largest retail market in the country. Retailers have discovered Portland and are either entering the market or expanding their existing store base.

Dick’s Sporting Goods, the country’s largest sporting goods retailer with 340 stores, opened their first Portland store at Washington Square. Dick’s has 92,000 square foot on two floors at the location of the former Mervyn’s. (This provides yet another reason why Washington Square is the number one mall in the market with sales of $700 per square foot). Petsmart, recently opened a 28,094 square foot store at Nyberg Woods with expanded services including pet daycare and overnight hotel accommodations for pets, veterinary services and the full line of pet supplies. Petsmart also opened a 20,087 square foot store in Cascade Plaza with stores under construction in Tanasbourne, Airport Way (Cascade Station) and Hazel Dell in Vancouver.

In the grocery/specialty food category, Fred Meyer opened a 139,000 square foot store on SR-14 in Vancouver that anchors the 196,000 square foot Grand Central Retail Center. In the Pearl District, Safeway is under construction with a 40,000 square foot store at The Lovejoy with 85,000 square feet of offices above and 20,000 square feet of retail and 231 apartments on the adjoining block. In the Hollywood District, Whole Foods is under construction at The Beverly on Sandy Boulevard at 42nd with adjoining retail and 52 condominiums above. This together with the new Trader Joes and 24 Hour Fitness, will make the Hollywood district Portland’s next urban retail hotspot.

Retailers are also remodeling, upgrading and relocating stores to serve the new and improved downtown. Nordstrom’s just completed remodeling their downtown store that implements their "designer initiative" with new boutique-style departments including Gucci, Dolce & Gabbana and Chanel. This is one of the few stores in the country to receive this new design, an indication of the confidence that Nordstrom’s has in downtown Portland.

On Broadway and Taylor, Columbia Sportswear reopened their expanded (16,000 square foot) store, which now includes an adjoining Mountain Hardware store. Across Broadway, Zell Brother’s Jeweler is reported to be constructing a two level, 11,800 square foot store. This together with Mario’s, solidifies the south end retail core. On Alder, Mercantile-Portland just opened a 7,029 square foot store that brings a new level of sophistication to Portland and reinstates Alder as a vibrant retail street.

Investors are also embracing downtown’s retail strength. Urban Renaissance Group acquired the Morgan Building on Broadway and is reviewing expanding the retail portion of the property. Ashforth Pacific recently acquired the 522,000 square foot PacWest Center and is remerchandising the 28,300 square feet of retail space to better serve the 50,000 daytime employees in the immediate vicinity.

This year, new retail space added to the Portland area will decline from 1.6 million square feet in 2007 to less than 500,000 in 2008. Availability will occur as numerous "big boxes" close stores totaling over 500,000 square feet including Wild Oats (3 stores), Wickes (4 stores), Levitz (2 stores), CompUSA (3 stores), Linens & Things (1 store) and Winco (1 store). While this will increase the vacancy rate to above the current 5%, it will provide inventory for new retailers entering the market.

New retail areas, new retailers in the market and the upgrading of existing shopping centers creates a retail scene in Portland Oregon unlike any we have ever seen. Every major center is within three years of an extensive rehab and areas like Airport Way and the I-5/Bridgeport Corridor have new centers generating retail activity, where there was none before. Old and new neighborhoods are vibrant because of the retail at the base of the residential or office building. Even downtown is coming together again, after much construction, to generate significant retail sales. In spite of the weak national economy and the closure by national "big box" retailers, Portland’s retail market has strength and vibrancy with continued opportunity for retailers looking to penetrate the market.