By Jon Peterson
Denver-based DCT Industrial Trust has signed new leases totaling 543,000 square feet of warehouse/distribution industrial space in the greater Seattle market. Most of this space is located in the Kent Valley with a small percentage in the Tacoma/Fife region.
“The amount of space really does reflect how much demand there is for industrial space in our market. There is just a lot more demand than there is space to accommodate many tenants. This is probably the best demand I have seen in the last 15 years I have been active in this market,” says Patrick Gemma, a senior vice president with DCT. He works out of the company’s regional office in Seattle.
The leases in the Kent Valley are two new developments that DCT had started on a speculative basis. Both of these properties are now 100 percent leased. The listing agent on the leasing of these assets is the Seattle office of Colliers International.
One of the properties in the Kent Valley is the 649,000 square foot DCT White River Corporate Center Phase I. There were two new leases signed with this property. One was with 291,000 square feet to LKQ Corporation. This lease will become effective in early 2016. The other one was for 143,000 square feet with Trans-Trade; its lease has already started. The other tenant in the property is UPS for 215,000 square feet.
“All three of these tenants were already in the marketplace. These new leases represent an expansion for each of them. One of the benefits of this project is that it offers the only industrial project in the Kent Valley with 32 foot clear heights. The other projects have 30 foot clear heights,” says Bill Condon, an executive vice president with Colliers International. He was one of the listing agents involved in the leasing efforts for Colliers.
The other property is the DCT Sumner South Distribution Center in the Kent Valley. There was a new lease signed for 84,000 square feet. The lease will start at the beginning of 2016. All of the property’s 188,000 square feet is now occupied.
The Kent Valley is a market that has strong market fundamentals. “This market is one that is land constrained. Over the past 12 months rents in the market have moved up 10 percent to 15 percent. The current vacancy in the market of warehouse/distribution is three percent to four percent. The area has shown and will continue to show in the future strong absorption,” said Condon.
The new leasing activity by DCT in Tacoma/Fife is with its 79,000 square foot DCT Fife 45 North project. One new lease covered 25,000 square feet in the property. It brings the occupancy in the property to 77 percent.
Industrial development in the Puget Sound has been well received over the past three years. “Since 2012, the 5.5 million square foot of assets that have been developed are now 89 percent leased. Additionally, the 2.7 million square feet currently under construction is 33 percent pre-leased,” said Gemma.
