Oregon’s retail real estate market continues to experience an unprecedented level of activity. From urban areas to small towns, activity is beyond belief, and the numbers show us why.
Nationally, retail sales are up 1.7%, year over year. In Oregon, the population increased 1.3% over the past year, topping 4.1 million, and unemployment is at an all-time low of 4.1%, with 50,600 new jobs created statewide in the past year, the fifth fastest growing state.
In the Portland metro area, the population increased by 30,000 (577 per week) to 2.45 million, as 15,983 new multifamily and single-family homes were built in 2017 (an 8.5% increase over 2016). The median home price continues to rise, up 6.4% over the past year, to $389,082 and monthly rent for a one bedroom apartment now averages $1,337.
Collectively, all of this creates the perfect environment for a strong retail market, which is shown repeatedly as tenants are actively adding stores.
Grocery Outlet’s same store sales are up 4.5% with plans to open 30 new stores systemwide this year. Dollar Tree same store sales are up by 3.8%, with 466 stores added nationwide last year and continued aggressive growth plans this year. Ulta Beauty’s same store sales are up 4.2%, with plans for 100 new stores nationwide, and new openings in Bend, Salem, and Cascade Station in Portland.
In downtown Portland, the loss of Macy’s has been a non-event as Sterling Bay and KBS Realty Advisors are developing 208,520 square feet of retail, creative, and office space in the location. Downtown Portland’s number one corner has been under-developed for years as Macy’s unsuccessfully offered Portland its suburban department store, downtown. That will all change, adding new life to downtown’s retail core.
At SW Broadway and Morrison, a new tenant is under construction and will open with its 12,259 square foot concept later this year. The Singer family now owns the long-vacant building at SW Park and Morrison (formerly Carl Greve Jewelers), which when remodeled and retenanted, as only the Singers can do, will add to the rejuvenation of downtown.
In the Pearl, Holsteins served its last burger after only eight months. The space at NW 12th and Couch is again available. Expect to see significant changes to that area as other tenants close and their space is retenanted.
Elsewhere in the city, every major street is a happening place, and we aren’t just talking about NW 23rd Street, Alberta Street, and Mississippi. On Martin Luther King Jr. Boulevard,
Natural Grocers just opened at NE Alberta, and George Morlan Plumbing will move its design center from Northwest Portland to 4709 NE Martin Luther King Jr. Boulevard.
On Powell, Target’s new 32,000 square foot store, at SE 31st, will join Natural Grocers at SE 39th and Powell in adding new life to that street. With the closing of The Original Taco House at SE 35th and Powell, expect to see additional retail at that location as well.
In the suburbs, Cedar Hills Crossing is tenanting the vacant Sports Authority building with Office Depot, Tuesday Morning and new to our market Buybuy Baby, with openings later this summer.
In Salem, CE John’s remodeled Willamette Town Center (formerly Lancaster Mall) opened Hobby Lobby which will be joined by Sierra Trading Company, Home Goods, and Ulta Beauty. More new stores are in the works.
In Eugene, Macerich is demolishing a portion of Valley River Center, and will add 14,000 square feet of new retail and restaurant space, an outdoor plaza, and a new mall entrance.
And in every small market throughout the state, Dollar General is placing stores (47 open or planned in Oregon, at last count). While a 7,000 to 9,000 square foot store in Aumsville, Oregon, does not sound like a big deal, it is. Especially when small towns have not seen new retail in decades (if we only had sales tax to capture some of the activity as new tax revenue for the community).
On the tenant side, Kmart continues to close stores, creating development opportunities in Salem, Oregon City, Beaverton, and Gresham (with the last two, it’s just a matter of time before they are actually out). Office Depot, Staples, and Aarons Rent-To-Own, to name just a few, are closing numerous stores as they shift from bricks and mortar to the Internet, while Toys ‘R’ Us is going out of business and leaving 735 stores vacant nationwide, creating opportunities in Clackamas (42,842 square feet), Tigard (38,000 square feet), and across from Washington Square (43,130 square feet).
Just as fast as one brand goes out, another is expanding within the market. We have worked on deals lately with Ulta Beauty, Bed Bath & Beyond, Hobby Lobby, Panera, and Chipotle, among others, and without exception, these retailers, and many other well-known brands, are searching the market for new opportunities.