Thursday, September 4, 2008
Portland, Oregon: Great Place for Multifamily / Apartment Investment Property
Just a generation ago Portland was derided for its bland food, gangs and strip clubs. Now it seems to be on everyone's top places to live, work, and play including CNN Money, Moviemaker Magazine, Men's Journal, AARP, Men's Fitness, and in early 2008 Popular Science even called Portland the "Greenest city in the USA." Articles in the NY Times extol the virtues of Portland's hot restaurant and bicycling scenes.
Most recent Portland population estimates peg Portland's population at 566,072 with the entire Portland/Vancouver metro area estimated at 2.16 million. Portland is the biggest city in Oregon; third in the Pacific Northwest after Vancouver, BC and Seattle, Washington.
Portland's evolution has been a long time coming, but the past few years have seen the rise of incredibly popular compact, planned development in the Pearl District and South Waterfront while existing neighborhoods have had curb-appeal makeovers. About 60 blocks of downtown are currently undergoing street and storefront upgrades as the result of a new light rail line from the Amtrak/Union Train station to Portland State University. One of the more interesting new developments is the current installation of a KGW-TV satellite newsroom at Pioneer Courthouse Square. The newsroom will follow the concept of NBC's "Today Show" newsroom on Times Square. It is set to open this fall just steps away from "The Nines" -- a new 9-story 331-room hotel sitting atop the historic downtown Macy's.
Old run-down areas of town once home to pawn shops and seedy bars are suddenly lively with light restaurants, wine and cocktail bars, brewpubs and a plethora of unique retailers. Changes have been most noticeable in North Mississippi, SE Division, NE Alberta St. -- with many others currently in the making.
What caused all this? Likely a lot of things but the city's compact growth and the push to infill is largely the result of the state's urban growth management planning that began in the early 1980's.
Despite the growth and energy that exudes from Portland as a result of its huge population of young people. Portland is one of the top destinations for America's 20-somethings. In 2006, Portland had the 4th highest net migration rate in the US. In that year alone, Portland gained nearly 12,000 adults aged 25-39 and another 12,000 55 and over.
Despite these population increases in highly desirable demographics, rents remain lower in Portland than in Seattle or San Francisco. According to the US Housing & Urban Development (FY2008), a studio Apartment in averages $600 in Portland, $700 in Seattle and $1100 in San Francisco. A two-bedroom unit rents for $800 in Portland, $1000 in Seattle and $1,650 in San Francisco. While other West Coast Cities have become increasingly expensive, Portland has yet to catch up. As migration to the area continues to increase, rents will only increase. And that can only mean good news for today's apartment investors!