United States -  Portland

Portland is beginning to experience occupancy decreases for the fist time since 2009 as new supply is outpacing demand growth. Notable demand increases since 2011 have triggered average rate (ADR) growth, with a robust 10% increase registered in 2015. Other positive factors have also contributed to the resurgence of the local real estate industry, including Intel’s massive expansion at its Ronler Acres campus in Hillsboro, and Nike’s $275-million commitment to expand its Washington County headquarters. Convention demand has strengthened, with the Oregon Convention Center reporting pre-recession booking levels. Relocations to the area, corporate expansion, and a growing tourism industry have transformed the local lodging industry; moreover, this growth is expected to continue to support the local economy and hotel demand.

Portland commercial demand remains strong, and leisure demand continues to increase annually, reaching peak levels during the summer and early fall. The Oregon Convention Center, a major economic engine for the metro area, supports healthy levels of meeting and group demand; local officials have worked for years to attract a developer to build a convention headquarters hotel. The development of a 600-room Hyatt Regency, scheduled to open in 2019, is anticipated to usher in thousands of additional delegates and millions of dollars in convention-related spending. Convention center officials point to a recent market study that found that the Hyatt Regency would help secure an additional five to ten citywide conventions each year, which is estimated to increase convention-related tourism spending to nearly $600 million on an annual basis. Construction of the hotel broke ground in late 2017 and is well underway. 

Aside from the aforementioned Hyatt Regency, several new, high-profile hotel projects are on the horizon, including the Canopy Pearl District, Cornelius Woodlark, and The Hoxton. Recently opened hotels include the Curio - A Collection by Hilton; AC Hotel by Marriott; Hyatt House; Hampton Inn & Suites by Hilton; and the Hi-Lo, an Autograph Collection Hotel. An additional ten hotel projects are in various stages of development in the greater Portland metro area. The area’s strict urban growth regulations and high barriers to entry, marginal new supply growth until now, and strong average rates across all market segments are driving value increases. However, the pace of value growth will be tempered in the near future, with new supply putting downward pressure on value acceleration. Nonetheless, strong economic fundamentals and a growing and ever-popular urban core are keeping the Portland market high on investors’ watch list.

The number of Portland-area hotel transactions have remained relatively steady, with prices per key and cap rates suggesting high investor-level confidence. Ten hotels priced at over $10 million have traded since 2014, including the sale of the RiverPlace Hotel at just over $750,000 per room, the highest per-room price ever paid in the city of Portland. With efficient operations in place, strong NOI levels, and values exceeding their prior peak, owners are becoming increasingly interested in asset disposition/acquisition opportunities; however, the entrance of new supply and tempering industry metrics will likely put downward pressure on values. Shifting market dynamics may help increase sales activity in 2018 and beyond.

* Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent “big picture” data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Change In Value For Market:

Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Portland RevPAR Change

Portland RevPAR

Year RevPAR
2007 $62.84
2008 $64.46
2009 $52.92
2010 $55.87
2011 $60.81
2012 $67.27
2013 $74.34
2014 $82.99
2015 $94.68
2016 $99.99
2017 $100.99
2018 $99.94
2019 (f) $99.93
2020 (f) $100.43

For more information, please contact:

Kasia Russell, MAI
[email protected]
  • +1 970 227-7799 (w)
Desiree Flanary, MAI
dflanar[email protected]
  • +1 970 381-9794 (w)