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October 11, 2017

Pierce County industrial market strong in Q3

Business Examiner Media

Real estate firm has released its third quarter reviews of the Seattle metro area, with the Pierce County industrial picture looking rosy.

"Kidder Mathews Pierce County continues to lead the way both in absorption and development and with an abundance of available land, this trend is likely to continue," Kidder Mathews forecast.

"On the leasing side, the market achieved 802,533 s.f. of positive net absorption in the quarter and nearly 2.6 million s.f. through the first nine months of the year. Three buildings totaling 232,910 s.f. were completed in the quarter, including Puyallup Distribution Center (123,500 s.f.).

"Absorption outpaced deliveries, with a drop in vacancy rate 4.25 percent to 3.46 percent. Average asking blended rents continue to increase, now at $0.58/s.f., a $0.03/s.f. increase over the past quarter.

"On the development side, 10 buildings totaling 4,053,559 s.f. are under way. Notable projects include Prologis Park Tacoma Buildings A & B (222,925 s.f. and 770,195 s.f.). Building B is pre-leased to UPS. These are nearing completion.

"Other projects include IPT Tacoma Logistics, Buildings A & B (837,620 s.f. and 286,525 s.f.), DCT Blair Logistics, Buildings A & B (542,750 s.f. and 428,228 s.f., Panattoni's Lakewood Tacoma Gateway (467,526 s.f.), and The Viking (438,065 s.f.).

"Of the projects underway, 770,645 million s.f. is pre-leased. Development hot spots include Sumner, Port of Tacoma/Fife, and DuPont. Overall, there is another 4.0 million s.f. in the pipeline. Of these, DuPont Corporate Center (the former Intel development) is under contract for intended demolition of some of the existing buildings and redevelop with industrial. The buyer is reportedly Industrial Redevelopment LLC.

"Significant move-ins this quarter include Amazon (401,076 s.f.) at Rainier Building-Sumner Corporate Park, and Alliance Door Products (118,912 s.f.) in the Chinook Building, also in Sumner. UPS will be moving into the Prologis Park Tacoma Building B (770,194 s.f.) soon.

"Pierce County's forecast is for shell rates to range between $0.35 to $0.55/s.f./month, NNN, plus add-on office rates of $0.70 to $0.95/s.f./month. Industrial building sale prices will range from $50/s.f. for older buildings to $100 to $140/s.f. for new or smaller buildings. Land values typically range between $10/s.f. and $16/s.f."

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