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Pricing Trends & Market Fundamentals
Available commercial real estate pricing data for Southern Oregon is limited, but several indicators offer a positive perspective:
Loan & Mortgage Rates: As of August 2025, commercial real estate loans in Oregon begin at approximately 6.23% for CRE properties and around 5.23% for multifamily loans, indicating competitive borrowing costs that may be attracting investor attention.
Capital Markets & Investment: National average cap rates are around 5.5% in several markets, reflecting prevailing returns amid constrained supply.
These financing conditions suggest that Southern Oregon investors may experience favorable lending terms and stabilized market expectations, particularly where supply remains tight and demand consistent.
Vacancy Rate Insights
Data for the Medford/Ashland submarket indicates slightly higher multifamily rental vacancy rates compared to other regional counterparts:
Medford/Ashland’s multifamily vacancy remains above the averages seen in areas such as Eugene and Bend.
While direct vacancy data for industrial, retail, or mixed-use properties is not available, broader U.S. trends show:
Office sector: National vacancies stand at 19.4% as of June 2025, an increase of 130 basis points over the previous year.
National Outlook: CBRE projects overall office vacancy to reach 18.9% by year-end, with primary submarkets performing more strongly.
Cap Rate Landscape & Sector Demand
National Cap Rate Benchmarks:
- Office (urban): 4.5%–6.5%
- Retail: 5%–7%
- Industrial: 2.5%–6%
Investment Trends: According to NAIOP’s 2025 Market Monitor, the industrial sector continues to observe strong transaction growth even as leasing fundamentals moderate, while the office segment shows some recovery in investment activity.
Oregon’s Investment Activity: The state expects investment sales to rise by about 10% in 2025, notably within the multifamily and industrial sectors.
Current Trends in Southern Oregon CRE
Industrial: Located along the I-5 corridor, Southern Oregon is positioned for logistics and warehousing growth. With increasing industrial demand and limited new supply, these assets are receiving more investor attention.
Retail: Adaptive retail formats, including lifestyle centers and mixed-use developments, correspond to changing consumer habits and are being considered by regional developers and investors.
Mixed-Use: Mixed-use projects are seeing increased activity; rising local housing demand supports combining residential, retail, and office uses for improved occupancy and income diversification.
Key Takeaways for Southern Oregon Investors
- Industrial and multifamily properties are receiving significant investment activity due to accessible financing and limited supply.
- Higher vacancies in the multifamily segment present potential opportunities for repositioning or value-add strategies.
- Interest in mixed-use developments remains steady, as diversified tenant demand can support project resilience.
- The national office lease market remains soft. Unless local factors indicate otherwise, caution is advised in this sector.
Sources: CBRE, CommercialCafe, NAIOP, Select Commercial
