Nike’s 189,400-SF Lease Reduces Portland Submarket’s Office Vacancy Rate
- Oct 11, 2010
October 11, 2010
By Barbra Murray, Contributing Editor
There’s nothing like a big lease to perk things up, and with the stroke of a pen, an office submarket of Beaverton, Oregon, has just shaved a handful of points off its vacancy rate. Nike Inc. has signed on for approximately 189,400 square feet in a deal that constitutes the largest new office lease in Beaverton’s Sunset Corridor in the last decade.
Nike, which maintains its headquarters in Beaverton, will house IT staff in two structures owned by Tektronix at the test equipment provider’s corporate campus about 10 miles west of Portland. A group of new and existing Nike employees will kick up their feet at 14200 SW Karl Braun Drive and 2540 SW Alan Blumlein Way. Also known as Building 55 and Building 58, the two-story office facilities encompass 82,500 square feet and 106,900 square feet, respectively.
Nike relied on real estate services firm Grubb & Ellis for representation in the transaction, and Cushman & Wakefield stood in for Tektronix. While financial details of the deal have not been publicly disclosed, Cushman had been marketing space at Building 55 for $23.00 per-square foot full service, and space at Building 58 for $10.20 per square-foot triple net.
Nike’s lease at the Tektronix campus goes a long way to helping an ailing market; the average office vacancy rate in suburban Portland was 18.7 percent in the second quarter, as per a Grubb & Ellis report. The transaction is even more significant for the Sunset Corridor submarket, which, according to the report, was 27.6 percent at midyear. With Nike’s commitment, the Sunset Corridor’s vacancy rate is expected to decline to 23.1 percent, the lowest level in the submarket since the fourth quarter of 2008.
However, the Nike deal can only do so much to shore up a severely hobbled office market. “Nike’s lease of 200,000 square feet in the Sunset Corridor will be a boost to that market, but the area still has significant inventory to work through and will continue to experience elevated vacancy and compressed rents for the foreseeable future,” as noted in the report.