Portland’s Columbia Corridor & Airport Way Industrial Market: 2026 Update
The Columbia Corridor and Airport Way have long been Portland's industrial backbone — home to the region's largest concentration of warehouse, distribution, and manufacturing space. But the market has shifted significantly over the past 12 months, and tenants, landlords, and investors need to understand what's happening on the ground right now.
Here's a data-driven look at where things stand heading into 2026.
Vacancy Rates Are Rising — But Context Matters
The headline number: Portland's overall industrial vacancy rate climbed to roughly 7.3% by the end of 2025, the highest level since 2010. That's a meaningful increase from the sub-4% rates the market was running just two years ago.
Within the Columbia Corridor and Airport Way, the picture is similar. Airport Way vacancy rose to approximately 6.9% by Q3 2025, up from 5.9% in Q2. East Columbia Corridor tracked at about 7.2% over the same period, with an availability rate near 9.1%.
But here's the context that matters: much of this vacancy is driven by new supply, not collapsing demand. Between Q1 and Q2 2025 alone, roughly 2.1 million square feet of new industrial space was delivered across the Portland metro, with only about 63% pre-leased at the time of delivery. East Columbia Corridor alone saw nearly 800,000 square feet of construction completions through Q3 2025.
In other words, the market is absorbing a wave of speculative development — and it's taking time to fill.
Absorption Turned Negative, But the Worst May Be Over
Net absorption — the measure of how much occupied space is growing or shrinking — turned negative in several quarters of 2025. Q4 2025 saw negative absorption of roughly 792,000 square feet across Portland's industrial market, with the Columbia Corridor and I-5 South submarkets accounting for a significant share as large blocks of space returned to the market.
Airport Way specifically posted about negative 228,000 square feet of year-to-date absorption through Q3 2025, driven in part by large users consolidating or vacating space.
The encouraging sign: by Q4 2025, move-outs slowed significantly, suggesting the market may be approaching stabilization. This doesn't mean a rapid recovery, but the pace of deterioration appears to be easing.
Lease Rates: Where Are Rents Heading?
Despite rising vacancy, industrial lease rates in the Columbia Corridor have shown resilience — so far. Triple-net warehouse rates in the submarket generally range from $0.80 to $0.88 per square foot per month for quality distribution space, with asking rents for Airport Way warehouse/distribution space holding around $0.83/SF NNN as of Q3 2025.
That said, the dynamics are shifting. With more options on the market and speculative space still leasing up, tenants are gaining leverage they haven't had in years. We're seeing landlords offer more flexible terms on larger deals — things like free rent periods, higher tenant improvement allowances, and more favorable escalation structures.
For tenants in the market right now, this is a window of opportunity that may not last once the new supply is absorbed. For landlords, the competition for quality tenants is real, and pricing strategies need to reflect the current supply picture.
New Development and the Pipeline
The construction pipeline remains active, though the pace of new starts has slowed in response to rising vacancy. As of Q4 2025, Portland had approximately 4.5 million square feet of industrial space under construction — a substantial figure, though down from the peak of speculative activity.
Key developments in and around the Columbia Corridor include continued build-out along Airport Way and Alderwood Road, where several large distribution facilities have been delivered or are nearing completion. Rivergate, at the northern end of the Corridor, continues to attract development interest for its proximity to the Port of Portland and intermodal freight infrastructure.
The pipeline matters because it signals where vacancy is likely to move in the coming quarters. If absorption improves — which early indicators suggest it might — the market could tighten faster than the headline vacancy numbers imply. But if demand stays flat, the surplus space will continue to weigh on rents and occupancy.
Notable Lease Activity
Despite the softening, significant deals are still getting done in the Corridor. One of the standout transactions of 2025 was Kehe Distributors leasing 383,040 square feet at 9555 NE Alderwood Road in the Airport Way submarket — a deal that underscores the Corridor's continued appeal for large-scale distribution operations.
Deals of this size also illustrate a broader trend: users with real operational needs are finding the current market favorable for securing space with strong terms. Companies looking to expand or relocate are in a better negotiating position than they've been in years.
What This Means for Tenants
If you're a tenant in the Columbia Corridor or considering industrial space in the Portland market, here's what you should be thinking about:
Negotiate aggressively. The balance of power has shifted. With vacancy up and speculative space available, you have options — and leverage. Don't accept the first proposal without exploring alternatives and pushing on rate, free rent, TI, and lease term flexibility.
Consider locking in longer terms. If you find the right space at a favorable rate, a longer lease term could work in your favor. As vacancy stabilizes and new construction slows, the market will eventually tighten again. Tenants who lock in current rates on 5–7 year terms may benefit significantly.
Evaluate your current lease. If your renewal is coming up in the next 12–18 months, this is the time to start the conversation. Use the current market conditions to benchmark your options — whether that's renewing in place at a better rate or relocating to a newer facility.
Work with a broker who knows the Corridor. The data tells part of the story, but submarket-level knowledge — knowing which buildings are truly available, which landlords are motivated, and where the best values are — makes the difference in a market like this.
What This Means for Landlords and Investors
The flip side: landlords and investors in the Columbia Corridor need to be realistic about the current environment.
Pricing to market is essential. Holding firm on asking rents when comparable space is available down the road will cost you occupancy. The cost of vacancy almost always exceeds the cost of a modest rent concession.
Invest in your assets. Properties with modern specs — clear heights of 32 feet or higher, ample dock doors, ESFR sprinkler systems, trailer storage — are leasing faster than older facilities. If your building hasn't been updated, now is the time to evaluate capital improvements.
Know your competition. With new speculative product on the market, older Class B and C industrial buildings face real competitive pressure. Understanding how your property compares — and adjusting your strategy accordingly — is critical for maintaining occupancy.
Looking Ahead: Columbia Corridor in 2026
The Columbia Corridor remains one of the strongest industrial submarkets in the Pacific Northwest. Its advantages are structural: proximity to PDX and the Port of Portland, access to I-205 and I-84, a deep labor pool, and a critical mass of distribution and logistics operations that create a self-reinforcing ecosystem.
The current softening is cyclical, driven by a supply wave that will work through the system. The fundamentals — Portland's strategic position as a West Coast distribution hub, limited alternative locations for large-format industrial, and long-term demand drivers from e-commerce and supply chain nearshoring — remain intact.
For tenants, the next 6–12 months represent a favorable window. For landlords and investors with a longer time horizon, the Corridor's trajectory still looks strong.
If you're evaluating industrial space in the Columbia Corridor or Airport Way — whether you're leasing, renewing, or investing — I'm on the ground in this market daily. Reach out for a no-obligation conversation about your specific situation and how to position yourself in the current market.