A new report from Marcus & Millichap, the commercial real-estate brokerage firm, indicates strong demand for industrial properties in the Puget Sound region, punctuated by an 800,000-square-foot building leased to Amazon.com at Stryker Business Center in Kent and the 540,000-square foot Des Moines Creek Business Park.
Projects are being planned and coming online at record levels. Through September, nearly 2.4 million square feet had been delivered, the majority in south King and Pierce Counties. The Kent Valley is strategically located between the ports of Seattle and Tacoma and close to Seattle-Tacoma International Airport. Region-wide, projects clocking in at 3,5 million square feet were under development.
The report credits “the vigorously expanding Puget Sound economy.” Job growth is higher than the national average and Pacific Rim exports continue to grow. It also says investors are driving demand, partly as a result of greater access to debt.
The forecast: 48,000 new jobs will be added, a 2.7 percent increase from 2013, vacancy rates will drop to 5 percent, and asking rents will increase 4.5 percent to an average of $6.96 per square foot. That compares with the 3.4 percent rise last year.
Metro Seattle ranked No. 8 nationally in the health of its industrial property sector in the Urban Land Institute and PWC’s recent Emerging Trends in Real Estate report.
One big challenge (and this is me writing) is that transportation infrastructure needs help. Many surface streets used by trucks are crumbling. Also, the Legislature continues to block action on completing State Route 167, a critical need for the Port of Tacoma.
Today’s Econ Haiku:
Big mergers are back
Too bad we had to fire you