Salem Commercial Real Estate News: Fall 2026 Update

Three decisions made or pending in Salem between July and October 2026 will shape commercial property values in Oregon's capital for years. The $150 million Cannery redevelopment on Front Street NE has stalled again. The City of Salem is advancing a significant rewrite of its development code aimed at removing barriers to housing. And the Salem City Council has started the legal process for a temporary moratorium on data centers after a $5.1 billion proposal surfaced at the Mill Creek Corporate Center.

For property owners in Salem, Keizer, and across Marion and Polk counties, these are more than headlines. They are signals about timing, land value, and risk. Here is what happened, what comes next, and what it means if you own, are buying, or are thinking about selling commercial property in the Mid-Willamette Valley.

What happened to the Cannery project in Salem?

The former Truitt Brothers cannery sits on roughly 13.66 acres along the Willamette River on Front Street NE, at the north edge of downtown Salem. The plant operated for more than a century and has been vacant since 2019. In October 2024, the city's hearings officer approved a land use plan for the site allowing three six-story mixed-use buildings with 382 housing units, a food hall, a winery building, a public market, and a public riverfront path.

In March 2026, New Jersey–based SilverSphere Capital, led by developer Aaron Stickney, announced it was under contract to buy the property and move forward with a roughly $150 million, two-phase redevelopment. We covered that announcement in detail in Salem's Next Chapter: The Cannery. The plan at that time called for closing by mid-May, demolition over the summer, and groundbreaking in October 2026.

That timeline is now off. In late July 2026, the Salem Reporter reported that the deal had stalled after SilverSphere and the Truitt family could not agree on an extension to the purchase contract. This is the second development team to step back from the site since 2023.

Why does October 22, 2026 matter for the Cannery site?

Land use approvals generally stay with the property, not the developer, which is why the Cannery entitlements survived the first developer's exit. But approvals come with deadlines. According to city records reviewed by the Salem Business Journal, the Willamette Greenway permit and subdivision approval for the Cannery must be exercised by October 22, 2026, while several other approvals run to October 22, 2028.

If those near-term approvals lapse without an extension, a future buyer may need to re-secure parts of the entitlement package, adding time, cost, and uncertainty. Watch for an extension request in the coming weeks. For anyone underwriting the site, the status of those approvals is the single most important variable.

What does the stall mean for north downtown Salem property values?

The stall does not change the site's fundamentals: rare riverfront acreage, Mixed-Use Riverfront zoning, and walkable proximity to downtown. It does change how buyers will underwrite nearby property. A seller near Front Street or the north downtown corridor should not price in the Cannery as a done deal; buyers will pay for what exists and discount what is only planned.

The broader downtown picture is mixed but active. New apartments have opened next to Salem Center, the former downtown Macy's building (a 188,500-square-foot full-block property) has been listed for sale, and local investors have carried most of the recent downtown reinvestment. Entitled, well-located infill sites remain scarce in Salem, and scarcity supports value even when a marquee project slips.

What is Salem's new housing code amendment (CA26-02)?

While the Cannery grabbed headlines, the city has been quietly advancing legislation that will affect far more properties. Case No. CA26-02, titled "Removing Barriers to Housing Development and Complying with State Law and Rules," proposes amendments to Salem's Unified Development Code. It implements several actions from Salem's Housing Production Strategy, including revising zoning to support more needed housing, preserving nonconforming housing, and affirmatively furthering fair housing.

The amendment also brings Salem into compliance with new Oregon laws and rules. Key proposed changes include designating Walkable Mixed Use Areas; density bonuses for accessible or affordable middle housing; allowing day care centers and residential treatment facilities in more zones; aligning public notice procedures for certain land use applications with new state law; more flexibility for bike parking in industrial complexes; and clearer multifamily design standards when altering existing developments.

The Salem Planning Commission scheduled its public hearing on CA26-02 for September 8, 2026. [UPDATE: add Planning Commission recommendation.] As with all legislative land use changes, the final decision will be made by ordinance of the Salem City Council.

How does CA26-02 affect commercial property owners?

The effects reach well beyond residential builders. Expanding the zones where day care centers are permitted widens the tenant pool for owners of retail centers, flex buildings, and older office space, a meaningful benefit in a market where finding the right tenant can take months. Walkable Mixed Use Area designations can support higher-intensity, mixed-use redevelopment on commercial corridors. Clearer rules for altering existing multifamily properties reduce risk for value-add apartment investors.

CA26-02 builds on earlier Salem reforms, including the 2023 elimination of minimum off-street parking requirements citywide and the 2024 code update encouraging small mixed-use projects. The direction is consistent: Salem is steadily expanding what owners can build and lease on existing commercial land.

Is Salem banning data centers?

Not yet, and possibly not for the project that started the debate.

In July 2026, Verrus, a data center developer backed by Alphabet spin-out Sidewalk Infrastructure Partners, went public with Oakline at Mill Creek, a proposed $5.1 billion campus near Turner Road SE and Deer Park Drive SE in southeast Salem. On July 30, Governor Tina Kotek directed the Oregon Department of Administrative Services to terminate the state's contract to sell about 32 acres of state-owned land for the project. On July 31, an application was filed on Verrus's behalf for a 600,000-square-foot, two-building data center campus on about 100 acres of privately owned land in the corporate center.

On August 3, the Salem City Council voted unanimously to begin the process of adopting a temporary data center moratorium and to start rewriting its zoning rules for these facilities. Oregon law requires 45 days' notice to the Department of Land Conservation and Development, a public hearing, and findings of compelling need. The city attorney estimated the earliest hearing could come around September 21. A moratorium would last 60 or 120 days, and a city-appointed task force is expected to deliver recommendations by the end of 2026. Hillsboro and Woodburn have taken similar steps.

Public opinion has been sharply divided. Many residents have raised concerns about water supply, power demand, and land use, while supporters point to jobs and tax base.

Does the moratorium apply to the Verrus application?

Probably not. Oregon law generally requires cities to evaluate a land use application under the rules in effect when it was submitted, provided the application is complete. Because the Verrus application was filed before the council vote, it may proceed under existing zoning. Whether the city deems it complete is the key question.

What does this mean for industrial land in Salem?

The Mill Creek Corporate Center was created to attract large employers, and the Mill Creek Urban Renewal Area was formed in 2005 to prepare 828 acres for industrial development. Data centers have been an allowed use in Salem's Employment Center zones since 2005. The city itself notes that very few Salem sites have the acreage and zoning needed for a data center.

For owners of large industrial and Employment Center parcels in Salem and the surrounding Willamette Valley, the practical impact is uncertainty around one category of buyer. New standards addressing electricity, water, noise, generators, and traffic could reshape which uses pencil out on big sites. Owners considering a sale should understand how these rules are likely to change before going to market.

How should Salem commercial property owners respond right now?

At Constant Commercial Real Estate, we treat every commercial transaction as a wealth decision, not just a transaction. Policy shifts like these are exactly when that perspective matters most.

First, know your zoning and what is changing. CA26-02 and any data center rules could expand or narrow your property's highest and best use. Second, separate headlines from fundamentals; a stalled project or a contentious council meeting does not by itself change the value of a well-located, well-leased asset. Third, pay attention to timing. Regulatory windows open and close, and buyers price in uncertainty. Finally, if you are weighing a sale, coordinate early with your CPA and attorney on tax strategy, including whether a 1031 exchange fits your long-term plan.

Frequently Asked Questions

Is the Salem Cannery project still happening? The site remains approved for mixed-use redevelopment, but the most recent sale to SilverSphere Capital stalled in July 2026. Near-term approvals must be exercised by October 22, 2026, unless extended.

When could Salem's data center moratorium take effect? The council began the process on August 3, 2026. After the required 45-day state notice, the earliest estimated hearing was around September 21, 2026. A moratorium would last 60 or 120 days.

What is Salem code amendment CA26-02? It is a proposed update to Salem's Unified Development Code that removes barriers to housing, designates Walkable Mixed Use Areas, allows day care centers and residential treatment facilities in more zones, and aligns city rules with new Oregon laws.

Is 2026 a good time to sell commercial property in Salem, Oregon? It depends on your property type, location, zoning, and long-term financial goals. Regulatory changes can create both risk and opportunity, which is why a property-specific valuation and strategy conversation is the best first step.

Talk to a Salem Commercial Real Estate Advisor

Constant Commercial Real Estate advises owners and investors across Salem, Keizer, and the Willamette Valley, including Marion, Polk, and Yamhill counties, as well as the Portland metro, Bend, and Eugene. If you own commercial property near downtown Salem, along the Front Street corridor, or in southeast Salem's industrial areas, we can help you understand how these changes affect your asset and your wealth plan.

Call 503-222-0282 or email info@constantcommercial.com to schedule a confidential consultation.