By Jon Peterson
Chicago-based CenterPoint Properties is planning a new 223,800 square industrial development in Kent. This new development is located at 26600 72nd Avenue South. CenterPoint would not comment on the total development cost of the project.
This development will commence First Quarter 2017, and it is being constructed on a speculative basis. The leasing efforts on the development will be overseen by the listing team of Taylor Hoff, Arie Salomon and Jeff Forsberg in the Bellevue office of NAI Puget Sound Properties.
“There is much more demand than there is supply in the Kent Industrial market today. Industrial rental rates have increased by 20 percent since the end of 2014. A major reason for this has been the strong rental demand and a lack of new development in a market where there is very little Industrial land left to build on,” says Taylor Hoff, a partner with NAI Puget Sound Properties.
The construction of the property should begin in February with plans for the development to be completed by December of 2017. “Our goal with the project is to have one tenant lease the entire building, but we are open to looking at splitting the building and having two tenants, if needed,” said Hoff. The planned office component of the property is around 3,000 square feet.
In the past the site had been used as an auto trailer storage yard. It totals 11.95 acres of land with good access and excellent exposure to Highway 167. The property is located approximately 15 miles from the Port of Tacoma and 24 miles from the Port of Seattle.
CenterPoint Properties has owned the land since late 2014. They acquired the land for the project at $17.50 per square foot. The price to buy this same land today would more than $20 per square foot, according to some estimates.
The industrial market in Kent remains very tight. The current vacancy in the market stands at 3.8 percent with limited new development opportunities. Rents on high quality industrial assets have increased at historic levels from 40 cents per square foot on a triple-net basis to over 52 cents per square foot over the past 12 months.
CenterPoint announced in November of 2015 that it was planning to triple the size of its industrial portfolio in Seattle in San Francisco. To accomplish this goal the company hired Bob Andrews as a senior vice president and regional manager for the company’s West Region portfolio who works out of the company’s regional office in Los Angeles.
“We would like to be able to triple the size of our portfolio on the West Coast in those two markets through either development or new acquisitions. I think that both of these markets are very strong and have solid demographics going forward,” said Andrews a year ago. The growth for the company on the West Coast would also include the Southern California/Los Angeles market.
Andrews also acknowledged that the company would be looking in Kent Valley and Tacoma for additional opportunities. “This is a market that is very tight from an occupancy standpoint and has built-in limits on new development due to a lack of land. Tenant interest in this market is very strong,” said Andrews.
CenterPoint has a national investment and development strategy of investing in major coastal and inland port logistic markets anchoring North America’s principal freight lines. Its assets include 52.2 million square feet and 5,500 acres under development in the company’s integrated intermodal industrial parks.
CenterPoint is owned by CalEast Global Logistics. This entity is funded by the California Public Employees Retirement System and managed by Menlo Park, Calif.-based GI Partners.