Downtown Portland May Lose Four MAX Light Rail Stations
TriMet, a mass transit operator in the Portland, Oregon metropolitan area, is considering closing four MAX light rail stations in Downtown Portland. For multifamily investors and property managers, this begs the question: How are apartment rents influenced by proximity to a MAX station?
On the chopping block are the Kings Hill/SW Salmon, Mall/SW Fourth Ave., Mall/SW Fifth Ave., and Skidmore Fountain Stations. The timing of this decision is uncertain, though closure would likely happen in September 2019.
Up until now, no MAX station has closed in the Portland light rail’s 40-year history. TriMet is considering the closure of these four stations due to low ridership in comparison to other downtown MAX stations and proximity to other MAX stations.
CoStar’s rent data indicate that Portland apartments located closer to a MAX light rail station lease at a premium in comparison to the overall average.
The average rent for an apartment in Portland is $1,314 per unit. Apartments located within a half a mile of rail transit average $1,437 per unit — a premium of $123, or about 9 percent. For apartments located within one-tenth of a mile of rail transit — a walk of three minutes or less — monthly rents average $1,700. This is a substantial $386 premium over the average rate, a difference of nearly 30 percent.
According to CoStar data, there are 182 apartment communities with 14,317 units that are within one-tenth of a mile of a rail station. Mostly these are luxury units — of this selection, 9,828 apartments are rated 4- and 5-Star in 56 communities. This actually comprises 18 percent of all the 4- and 5-Star units Portland.
The largest of these well-located communities is 657-unit Hassalo on Eighth, where monthly rent averages $1,661. Situated in downtown Portland, Hassalo on Eighth is within a half a mile of five different MAX stations. The nearest is the NE Seventh Transit Stop – an approximately one-minute walk away.
Located within one-tenth of a mile of the Skidmore Fountain MAX Station, among those TriMet is eyeing for closure, 65-unit 38 Davis would be directly impacted by this proposal. Delivered in June 2017, monthly rents average $1,353 – with the community’s 40 studios leasing at $1,096.
Luxury apartment buildings located near MAX stations are also attractive to investors. For example, the 244-unit Indigo at Twelve West sold in July for $206 million. Also in downtown Portland, the community’s units lease at an average monthly rent of $3,018. Indigo at Twelve West is located within two-tenths of a mile from five separate MAX stations.
CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.
SEPTEMBER 17, 2018