The industrial market across the Puget Sound region is experiencing one of its strongest runs in recent history, and national investors are looking for opportunities to expand their footprint here. Reno, Nev.-based Dermody Properties is one of those investors, and the company just put down $62 million (just under $208 per square foot) to acquire a property in Kent that is located in the region’s busiest logistics submarket. The asset, located at 8220 S 212th Street in Kent, was sold by Olympic Steamship Company, according to documents filed with King County, and it features a 298,350 square foot property and nearly two acres of yard area/trailer parking, according to a recent property flyer.
The property is currently occupied by Apex Cold Storage and Columbia Distributing, based on Google Maps, and another tenant includes International Leasing. The location is in the vicinity of State Highway 167 and just east of Interstate 5, a main thoroughfare for the industry across the region and West Coast markets.
Dermody Properties, which has a local office in Bellevue, is a national e-commerce, logistics and industrial real estate investment, development, acquisition and management company. It has been in the business of providing industrial space for over 60 years with 8 regional offices across the country. In the Pacific Northwest, the company owns and operates a 294,000 square-foot property located at 19730 NE Sandy Boulevard in Portland, Ore. as well as LogistiCenter in Auburn Building A, an 80,800 square foot property located in that city.
The industrial market across the Western United States, as well as the rest of the country, has been the darling of the commercial real estate industry for the last several years, and especially so since the start of the global COVID-19 pandemic. Investors, ranging from local operators to national and global institutional funds have been pouring money into the sector, elevating prices to record highs all while vacancy, spurred by e-commerce, has been dipping to historic lows.
In one recent example, Salem-based Oregon Public Employees Retirement Fund approved three new real estate commitments totaling $750 million that will all be invested in industrial assets in a variety of markets around the country. This initiative will also target acquisitions across the West Coast, according to sources familiar with the investor.
The moves by the pension fund to expand its industrial portfolio is reflective of the strategy large public pension funds have deployed across industrial assets, according to industry sources. This type of investor in many cases is looking to be over-allocated to the industrial property type when compared against the major benchmark, the NCREIF Property Index. Many of the major pension fund real estate consultants have recommended to their clients to have a larger percentage of its real estate portfolio invested in the property type, and they believe industrial will be the best performer of the four major property types over the next several years.