Five Key CRE Trends to Watch in Salem, Oregon for 2026

I’ve written about it before: Salem’s CRE market benefits tremendously from its role as Oregon’s state capital and county seat providing economic stability through government employment, healthcare, and education sectors.

While broader northwest trends show office challenges and industrial resilience, Salem’s government-driven economy offers a defensive play. 

BTW: Government stability provides a stable economy for smart CRE investing — this is a core tenant/principle behind our $25,000,000 Capitol City Opportunity Fund (More info @ capitolopportunityfund.com). Here are those trends to watch:

1.          Stability from Government-Anchored Demand State government offices (and Marion County offices) and related services form a core tenant base, insulating Salem’s office and retail properties from severe downturns seen in tech-heavy markets like Portland or Seattle. With consistent public sector employment, investors prioritize properties near the Capitol for reliable occupancy and renewals in 2026. Example: There is one large office currently for sale I’m currently watching right near the capital. The owners are still out of touch on pricing, but time will tell. (Hint: This particular property likely needs to trade at an 8 cap or better given its size/risk)
2.          Tight Industrial Market and Low Vacancy Salem’s industrial sector shows very low vacancy (around 2% in central areas) and rising rents, driven by logistics and manufacturing needs in the Willamette Valley. Limited new supply positions well-located warehouses for strong performance, with investors eyeing small-bay flex space amid national industrial stabilization. Our managed properties in this asset class are performing well, and are on target to have a great 2026.
3.          Office Sector Caution with Flight-to-Quality Hybrid work impacts persist (Governor Kotek, GET THE STATE EMPLOYEES BACK TO OFFICE!), but Salem’s downtown office market (near government hubs) fares better than Portland’s. Investors watch for stabilization in Class A buildings with amenities, while older assets may face pressure or conversions; overall northwest office vacancies are expected to peak and decline modestly in 2026. Our managed office assets in Salem are experiencing a normal rate of occupancy. One historic property has had a lot of leasing activity the last half of 2025 and we expect that to continue into 2026. For a list of our properties for lease, visit pikesnw.com/commercial-listings
4.          Increasing Transaction Volume and Capital Return As interest rates stabilize and bid-ask spreads narrow, national forecasts predict 15-20% rise in CRE transactions in 2026. Salem benefits from its affordability relative to Portland, attracting investors seeking resilient, government-backed assets in secondary markets.
5.          Downtown Revitalization and Mixed-Use Opportunities Ongoing efforts to revitalize downtown Salem—boosted by cultural amenities and population growth—draw interest in retail and mixed-use properties. Neighborhood centers and essential retail remain steady, with investors monitoring consumer spending and potential for experiential developments. More police, more cleanup and city/county/state cooperation to clean up our capital city is a must. We need to get the mentally ill off the streets and into treatment. Knocking out this major repellent to downtown growth will be huge for Salem. In fact, tackling this problem easily makes Salem one of the top CRE investment playing fields. 

Overall, Salem’s CRE outlook for 2026 emphasizes defensive, income-focused investments leveraging its stable economic base, contrasting with more volatile PNW submarkets. Risks include broader economic slowdowns, but fundamentals support cautious optimism. As an investor, watch your expenses like a hawk and make sure your leases are enforced and you get far ahead of any potential vacancies – so start those conversations earlier – 6 months or even more in some cases.

Need a hand with CRE property management, listing (leasing or selling) or acquiring your next property, give me a call. Our team is ready to help you accomplish your goals.

PS. As you may know, Pikes Northwest is a franchisee of SPERRY, a network of commercial real estate brokers across the US and in multiple countries. You can see all SPERRY properties for sale or lease across the U.S., here: https://www.sperrycga.com/properties/ If you note one of interest, reach out.