Vancouver WA Overview
Vancouver WA is a city on the north bank of the Columbia River with a population of 167,405 residents. The city was incorporated in 1857 and is the fourth largest city in the state. Vancouver is the county seat of Clark County and forms a part of the Portland-Vancouver metropolitan area, the 24th largest metropolitan area in the United States. More than one third of the Vancouver urban area’s population lives in the unincorporated urban area north of the city limits, including the communities of Salmon Creek, Hazel Dell, Orchards and Felida.
The geographic area boasts an abundance of beauty – it’s framed by the scenic Cascade Mountains to the east, the majestic Columbia River to the South and is located just North of Portland and only 10 minutes from the Portland International Airport. The two major bridge crossings running north-south over the Columbia River between Oregon are Washington are Interstate Bridge on I-5 and the Glen Jackson Bridge on I-205.
The Vancouver WA economy is highly influenced by neighboring Portland, Oregon. The State of Washington has no individual or corporate income taxes with a property tax lower than the national average and a sales tax above the national median. Conversely, the State of Oregon has one of the highest state income taxes but no sales tax. For that reason, many Vancouver residents shop in Portland to save the sales tax and live and work in Vancouver where they pay no income tax.
Major employers include SW Washington Medical Center, Evergreen & Vancouver School Districts, SEH America, Wafertech, Legacy and Fred Meyer. Vancouver also contains the corporate headquarters of Nautulus, Inc and the Holland Company – the parent company of the Burgerville USA restaurant chain. With the slow-down in the timber industry, Vancouver employment has shifted to high tech and service industry jobs.
A large enough percentage of Vancouver residents choose to work in Portland, that Vancouver can be considered a “bedroom community” of Portland. As a result, there is typically significant rush hour congestion on the two bridges that cross the Columbia River. In 2006 there were 278,043 weekday vehicle crossings of the two bridges.
Vancouver is home to Washington State University, Vancouver Clark College and the International Air Academy, Inc. It has two public school districts that combined have 14 high schools, 12 middle schools and 42 elementary schools.
Vancouver WA Commercial Real Estate
Commercial real estate in and around Vancouver WA is stronger in 2014 than in recent years across all sectors such as office, retail, industrial and multi-family. During the previous construction boom, Vancouver WA was not overbuilt with regards to commercial real estate. As such, despite elevated levels of vacant space, owners were able to get through the economic downturn.
While new construction continues in the region steadily, very little of it is considered speculative development. Instead, the majority of new construction is supported by signed leases and quality tenants.
Like many markets, residential real estate values have increased in Vancouver WA. The market conditions have led to strong demand for residential land. Multi-family construction is expanding at a rapid pace, and a large percentage of it is targeting the upper end rent scale.
Overall, in Vancouver WA, vacancy is declining, absorption rates are rising and rental rates are increasing in all commercial real estate sectors. The only exception is in the retail sector where rental rates seem to be holding steady.
Vancouver WA Retail Investment Market Analysis
- The average past years cap rate is 5.8% compared to the 5-year average of 7.6%
- The vacancy rate is down to 8.5% compared to the 5-year average of 9.6%
- Median months to sale in the Vancouver Market is 10 months in 2014
- Sale price per SF is $149 compared to the 5-year average of $124 PSF
Vancouver WA Office Market
We define one of the “office markets” in Clark County as West Vancouver. Essentially this market is bordered by I-205 on the East, includes Westfield Shopping Town Center, and is bordered on the North by State Route 500, although it encompasses the St Johns Boulevard corridor, and includes Downtown Vancouver.
Using data from the CoStar Group, buildings are broken into three classifications: A, B and C. Here is a recent snapshot of the West Vancouver Office Market as of the 3rd quarter of 2014.
|Submarket||Existing Inventory||Vacancy||Absorption||Quoted Rates|
|# Blds||Total sq.ft.||Vacancy||Vac%|
A clear pattern emerges looking at this data. Office users in this core Vancouver market are very price conscious and value driven. While an overall vacancy rate average of 8% the difference in vacancy between Class A and Class C is almost double.
Within this West Vancouver Office Market there really are three distinct sub markets. The Downtown/Westside corridor, the Vancouver Mall Hub, and St Johns/Central Vancouver neighborhood.
The Class A space is predominantly in Downtown Vancouver- almost three quarters of it and that is where the most significant vacancy is over 15%. These buildings average 11,400 sq. ft. and are multi story /multi tenant. An ongoing symbol left from the Financial Tsunami of 2008 is that larger corporate type users have not returned to Vancouver’s Downtown.
Contrast this to the Westfield Shopping Town Center Class A buildings of which there are five, averaging about 68,000 SF in size. The vacancy rate there is 3.4%. Of note, the asking rates in the two submarkets are almost exactly the same.
This differential between Downtown and Vancouver Mall vacancy is not nearly as dramatic for the Class B category, both very close to 9% and again the asking rates almost identical.
Understanding Mixed Use In Vancouver WA
Mixed use development refers to the development of land with a mix of mutually-supporting retail, service, office and residential uses. It promotes related site planning and design which integrates and interconnects several land uses into a development that are mutually supportive to each other. This approach to land use and development has been evolving throughout the United States since the 1960’s. By blending land uses together it creates a sense of place that is convenient, visually attractive and pedestrian friendly by its very orientation. The biggest challenge locally is to make it economically feasible and still provide for a large range of choices.
Mixed Use Zoning is an attempt to reach the Community Goals and Vision by developing higher density areas that encourage people to live, work and shop within the same area by providing walkable neighborhoods with mobility options. The result is hopefully decreased dependence on automobiles to meet the daily needs of its families and residents.
Industrial Market in Clark County
Within the SW Washington Industrial Market for 2014 we saw an upswing of lessees and business owners, starting to scramble for spaces. They consisted of current business owners looking to expand as the economy recovered, instead of the reverse trend of businesses closing and few new comers to our industrial market. As the economy started to flourish the developers got on board and started to search for ground to build new industrial space in Clark County.
Optimism, is the key word for SW Washington in the first quarter of 2015. The industrial sector is on a roll! As new construction was/is being completed the business owners are coming out of the fox hole of the recession and stepping up for larger lease square footage and new businesses attempting to get their proverbial ‘feet wet’. Developers are taking a sigh of relief and enjoying their new, and old clients returning for a run at the new market. No keeping us Washingtonians down!
With Vancouver, Clark County and surrounding areas offering over a million workers, our business tax structure, and absence of personal taxes to pay, industrial businesses have either strongly considered Clark County or actually moved their businesses to our county. Being on the I-5 corridor the area has a direct connection to many different business situations needing to move or receive product. Also, adding to the ease of movement is our water ports in Vancouver, Ridgefield and Camas /Washougal, air access from Portland International Airport and a main route for train shipments. These areas are the highest concentration of industrial properties, but also included are Battle Ground in East County which is served by rail and SR 502.
Summary of Industrial Statistics 2015
Port of Vancouver: 2.4 Million SF of Industrial Space, 99% occupancy. In addition there is also a marine warehouse on the terminal for handling marine cargo, 0% occupancy.
Clark County Industrial Transaction Totals January – May 2015
Total 53 Transactions – Total $ Amount of Industrial Sold/ Closed $47,750,805 – Average Sale $900,960
Total AC Sold 92.07 – Total AC Bare Land 67.03 – Total AC w/ Buildings 25.04
Total Building SF 68,839 – Average SF Building 2,749
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