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The number of vacant offices in downtown Portland continues to rise

The impact of people working from home continues to impact smaller downtown businesses that depend on foot traffic.

PORTLAND, Ore. — Could 2023 finally be the year things turn around for downtown Portland? That's the hope for many businesses looking for solutions and most of all, customers. A big piece of that has to do with daily foot traffic and getting people back into offices, say many restaurant owners.

"We expected it to be better [by now], to be honest," said Hanz Arwas, who owns A Taste of Greek food cart at 321 Southwest 2nd Avenue.

"We start seeing more movement and more life in downtown but we are way far from reaching the pre-pandemic situation," Arwas said. "I had a couple neighbors, they just moved out because the lack of business and lack of movement and lack of safety, also."

The Portland Business Journal (PBJ) recently highlighted the latest numbers for office vacancy in downtown Portland. Citing CBRE, a global commercial real estate firm, office vacancy topped 27% in the fourth quarter of 2022, a 1% increase over the third quarter.

"The numbers in there represent a more than doubling of the pre-pandemic vacancy rates, according to CBRE," said PBJ staff reporter Jonathan Bach. "The downtown is an ecosystem and so when there's a disruption to that ecosystem, everyone's affected."

In contrast, Bach noted the vacancy rate in Portland suburbs was 15%.

On Sunday, clothing retailer J. Crew closed its Pioneer Place location. A block away on Southwest 4th Avenue and Morrison Street, another retail space sits empty where Starbucks used to be. The coffee giant closed that location in 2022 citing safety concerns.

KGW reached out to J. Crew to ask why it decided to close the store. A spokesperson said in a statement that the company "made the decision to close certain stores to better support our broader omnichannel strategy."

Despite challenges, many downtown businesses are holding fast, including Kells Irish Pub at 112 Southwest 2nd Avenue.

"It's a lot better than it was six months ago, for example, 100% better," said Kells owner Gerard McAleese. For a time, McAleese considered selling his downtown location, even putting the property on the market. He no longer has immediate plans to sell, though he said they too are feeling the pain of thin lunchtime crowds. McAleese said he hopes support for downtown businesses will grow.

"Listen to us. Listen to the shop keepers, the mom and pops of downtown that makes Portland unique in its own way," McAleese said. "Those are the people who are crying out for help but they never ask for help."

Arwas, the food cart owner, said most of his customers now are strangers. But as some workers return to even part time in the office, he’s starting to recognize faces again and that brings him hope.

"When I see somebody from pre-pandemic, I really get happy," Arwas said. "Because we feel like things are starting to come to normal."

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