Winter 2023/2024 Issue

Chapter Profile: NAIOP Oregon

By: Jennifer LeFurgy, Ph.D.
Portland is the second-most populous city in the Pacific Northwest, trailing only Seattle.  4nadia via iStock/Getty Images Plus

Members are supporting each other through challenges and identifying emerging opportunities.

Despite the economic challenges facing commercial real estate in Portland, the members of the Oregon chapter remain committed to reenergizing the central business district, advocating for affordable housing and expanding inclusive opportunities.

NAIOP Oregon Chapter President Lauren Golden Jones, vice president of development with Capstone Partners, LLC in Portland, spoke with Development magazine about current CRE interests at the state and local levels.

Development: How are the market conditions for member companies in your area?

Jones: Portland is facing many of the same challenges and opportunities as other West Coast cities. Industrial leasing velocity remains strong, albeit not as strong as in 2020-2022, and industrial rents continue to grow. The investment sales volume is gradually starting to pick up in the office and multifamily sectors. General contractors continue to have a strong pipeline with public, nonprofit and affordable housing work. The private side is not seeing pricing drift down quite yet. The lack of available construction financing is putting a lot of private projects on hold. There’s no doubt among our members that this is a challenging time. However, we are working to support each other.

Development: What are the challenges you’re facing in either the business or regulatory climate in your area?

Jones: The business and personal tax rates in Multnomah County are causing many businesses to think hard before renewing leases in or relocating to Multnomah County. Multnomah County now has the second-highest total state and local income tax rate in the United States at 14.69%. New York City has the highest at 14.78%. In Multnomah County, the top tax rate starts for single taxpayers with incomes above $125,000 and joint filers at $250,000. In comparison, New York City’s top tax rate starts at $25MM.

The good news is that many local elected leaders are recognizing the tax burden and are developing ways to alleviate the burden on businesses. The Portland City Council recently passed a resolution allowing businesses to waive up to $250,000 in business license taxes if the business signs a long-term lease in the Central City. The council also added downtown Portland as an enterprise zone, which allows downtown businesses with new investments to waive property taxes for five years.

The governor is also leading an effort to build more housing throughout the state and reduce barriers to housing. NAIOP Oregon has been at the table for many of the conversations at the Portland municipal level to influence regulatory changes that would facilitate the production of housing. Examples include efforts to reduce permit-review timelines, freeze impact fees and put a temporary freeze on regulations that add significant costs to projects.

Development: What are the opportunities in commercial real estate in your area right now?

Jones: For real estate investors who are willing to invest right now, there are good opportunities for buying office and multifamily in the core at significant discounts from replacement cost.

Development: What are some of your chapter’s legislative priorities?

Jones: NAIOP Oregon’s current legislative priorities are:

Economic development and job growth: Advocate for policies that promote economic development and job growth within the commercial real estate sector, including tax incentives and regulatory reforms that encourage investment and business expansion.

Land use and zoning: Seek land-use and zoning reforms that streamline development processes, reduce permitting delays and encourage responsible land-use planning that aligns with the needs of developers and communities. Support responsible urban growth boundary (UGB) expansion for industrial development and workforce housing needs.

Housing affordability: Collaborate on initiatives that address housing affordability challenges, such as regulatory reforms to reduce development costs [and] increase housing supply, responsible UGB expansions, and reform to increase building within the current UGB.

Central City improvement: Support addressing concerns about law enforcement resources, the need for robust addiction-treatment capacity and potential unintended consequences, such as enabling drug use.

Development: Education is an important part of NAIOP’s mission. Have there been educational sessions specific to your chapter recently?

Jones: NAIOP Oregon continues to support an annual case study competition at the Portland State University Center for Real Estate. Our members engage with students in the classroom, share their experiences with the students and serve as resources to students as they grow in their careers.

NAIOP Oregon has had a strong Developing Leaders group for many years. The Developing Leaders Board sponsors many events, such as the First Look Events, to foster an understanding of the development and lease-up process for people earlier in their careers. The Developing Leaders Board started a mentorship program in 2022, which brings icons in the industry together with members early in their careers to have an open dialogue about how they progressed in their field.

Development: Is there a question I didn’t ask you here that you’d like to answer?

Jones: NAIOP Oregon is embarking on a large-scale survey of members and nonmembers. The goal will be twofold. We will learn where our members are finding the most value, such as programs, networking, advocacy or educational opportunities. The survey will also provide us with input on how to foster a more diverse and inclusive community at NAIOP Oregon. We retained a consultant who specializes in diversity, equity and inclusion to develop the survey, help us interpret the results, and conduct focus-area groups based on the feedback. We are excited about what we will learn and how to improve our chapter so that it benefits our members and attracts more members to our chapter in an inclusive and welcoming manner.

Jennifer LeFurgy, Ph.D., is editor-in-chief of Development magazine.



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