By Meghan Hall
Issaquah-based Costco Wholesale Corporation is expanding its footprint, and has taken 451,151 square feet of space in DuPont, Wash. According to sources familiar with the deal, Costco leased the space at 4175 Pioneer Avenue in the wake of Pier One’s anticipated exit from the site.
The Puget Sound Business Journal was the first to report on the transaction.
According to public documents, the property is owned by an entity affiliated with Carlsbad, Calif.-based Pierce County Investors LLC. Excise tax documents indicate that the property was purchased by Pierce County Investors in 2006 for $28.1 million. Pierce County Investors acquired the asset from First Industrial Realty Trust, who worked to develop the property. When FIrst Industrial purchased the site in 2005,it paid $5.67 million for the property.
In addition to the 451,151 square feet of warehouse space, the property also includes 15,601 square feet of office. The building was originally constructed in 2006 and sits on about 19 acres of land, according to Pierce County Assessor’s parcel data.
The warehouse is located between Olympia and Tacoma, not far from Interstate 5. A number of other commercial and industrial tenants are located nearby, including an Amazon fulfillment center, a Kimberly Clark distribution center and FedEx.
During the first quarter, 3.52 million square feet of industrial space was absorbed, the largest amount on record. According to data from Colliers International, the majority of activity was located in Pierce County, where 1.18 million square feet was leased.
“With 3.53 million sq. ft. of net absorption in the first quarter of 2021, any remaining Covid-related uncertainty surrounding Industrial product in Puget Sound was quickly erased, likely turning to optimism extending into the foreseeable future,” states Colliers’ report. In-line with the rest of the US, warehouse space supporting e-commerce and third-party logistics continued to carry the region, accounting for 96 percent of that absorption number and fueling aggressive rent growth.”
Growth is expected to continue. In 2020, consumers spent $861 billion online with retailers, up 44 percent in 2019. Competition for projects close to consumers, as well as last-mile developments, will rise as tenants compete for space.