Although the pandemic rounded off a thriving decade for Portland and has constricted employment, the metro’s multifamily market continues to benefit from a steady influx of residents priced out of more expensive West Coast markets.
Nonetheless, hurdles do exist, such as expiring eviction moratoriums, rent controls and limited supply, Hollie Forsman, director of operations at Portland-based Guardian Real Estate Services, told Multi-Housing News.
In the interview below, Forsman reveals the most critical trends and challenges shaping Portland’s multifamily market right now.
READ ALSO: What Is Attracting Investors to Portland?
How has Portland’s multifamily landscape changed over the past year?
Forsman: In the past year, Portland’s multifamily market transformed from one of the most challenging times to some of the best conditions in recent history. In 2021, the rental market bounced back, with high demand and upward pressure on rents.
With the eviction moratorium recently lifted in Oregon, there is a renewed focus on rent collection and utilizing rent assistance.
What are the main trends shaping Portland’s multifamily now?
Forsman: Currently, the upward pressure on rents is causing diminished housing options for the average renter. A combination of continued rent-control regulations, inflation and overall low supply make attracting capital to our market challenging.
In addition, the employment market has constricted, and finding candidates to staff properties is difficult.
What does Portland have to offer to investors?
Forsman: Portland remains one of the most affordable major West Coast rental markets. Through the ups and downs, Portland maintains a relatively stable market performance.
Furthermore, Portland offers a robust variety of industries including technology, manufacturing and construction. If one industry takes a hit, such as the hospitality industry during the pandemic, the diversity of the overall market keeps Portland strong.
With an influx of migration still at play, Portland remains a growth opportunity in terms of asset values over time.
What types of properties are the most sought after now in Portland?
Forsman: Suburban properties are in the highest demand. We see high demand for regulated affordable properties, such as LIHTC and Section 8. In addition, value-add properties are in high demand.
Which areas of the metro are the most coveted now and why?
Forsman: The exodus from the core to suburban markets continues, with a large focus on Vancouver/Clark County, Beaverton and other submarkets. These areas offer larger apartments on average, lower crime rates and fewer urban-related problems.
To what extent has the pandemic affected Guardian’s plans and operations? Have your business strategies changed since the onset of the health crisis?
Forsman: The pandemic pushed Guardian to quickly adapt and adopt new protocols on everything from PPE to remote work to rent collection. While our overall business strategies haven’t changed, we adjusted throughout the pandemic to focus on efficiencies.
Our investment in technology has been crucial to adapt to remote work, employee training, online payments and virtual tours. We have also explored efficiencies in staffing, using technology improvements to accommodate multi-site managers and employees, and outsourcing staffing to manage the cost and availability of employees.
What do you plan to accomplish in the metro this year?
Forsman: We have an ambitious development and acquisition pipeline with 800 units closing capital and beginning construction in 2021. Our management pipeline is also robust, as we anticipate more than 500 additional units in the next 12 months, with development projects in the pipeline to follow. Internally, our team is growing, with more than 60 positions currently open.