By Jack Stubbs
The industrial market in Kent has been active over the last few months—with industrial assets at a premium—and a recent sale has continued this trend.
On Monday, October 23rd, West Valley Distribution Center I, III and V in Kent sold for $17.5 million, or roughly $126 per square foot, according to public records filed with King County. The buyer was EverWest Real Estate Partners, a Denver, Colorado-based privately held real estate investment management and operating company. The seller was Black Creek Group, a real estate investment firm, also based in Denver.
On October 30th, Holliday Fenoglio Fowler, L.P. (HFF) announced the sale of the three-building, infill, industrial portfolio totaling 138,296 square feet in Seattle’s North Kent Valley.
The HFF team marketed the property on behalf of the seller, a subsidiary of Industrial Property Trust Inc., an industrial-focused program sponsored by an affiliate of Black Creek Group. The HFF investment advisory team representing the seller included director Dave Otis; Michael Leggett, co-head of HFF’s West Coast Team; and Scott Pertel.
The first property, located at 19026 72nd Ave. S, is a 38,296 square-foot storage warehouse built in 1978 that sits on nearly 4 acres of land. Roughly 11,000 square feet of the space is dedicated to warehouse and office space, with the additional 27,284 devoted to industrial light manufacturing. The warehouse is currently home to Seametrics, a company founded in 1990 that manufactures a variety of mechanical products aimed at serving various industries, such as industrial and municipal, irrigation and environmental. The space is also occupied by INW, a division of Seametrics that manufactures a variety of products in the environmental technology sector.
The second property, built in 1978, is located at 19030 West Valley Highway, half a mile to the west of the Seametrics warehouse. Set on 3.9 acres of land, the warehouse totals 72,000 square feet, with 3,600 dedicated to warehouse and office space and 68,400 dedicated to warehouse distribution. The property is currently occupied by Wall to Wall Stone Corp., a producer of granite and quartz countertops.
The two properties are located roughly 4 miles to the north of downtown Kent, 4 miles from access to Washington State Route 167 and just 4.5 miles to the east of the Sea-Tac airport.
EverWest Real Estate Partners aims to create significant value for investors through a combination of capital appreciation, strategic acquisition, development, repositioning and management of commercial real estate assets, according to the company’s website. Founded in 2015, the company’s three main strategies are investment sourcing, asset management and property management. EverWest’s other asset, also located in Seattle, is a 447-unit multifamily project under construction at 2202 8th Ave. The Class A luxury residential tower, which will also consist of 6,833 square feet of retail in the heart of South Lake Union, is set to be completed in the second quarter of 2018.
Black Creek Group, founded in 1993, develops, acquires, operates, finances and sells commercial and residential properties throughout the United States. The company has developed more than $3 billion worth of properties and has owned and operated more than 1,300 office, industrial, retail and multifamily properties across North America. The company’s other industrial asset in the Puget Sound region is the Tacoma Logistics Center, a 1.1 million square foot speculative development project on a 58-acre parcel in the Port of Tacoma that includes two divisible Class A warehouse and distribution buildings.
The recently-released 2017 Q3 market report by NAI Puget Sound Properties, Kent Valley Insider, reveals that the industrial submarkets in Kent Valley—Renton, SeaTac, Tukwila, Kent, Auburn and Sumner—remain as robust as ever. The current overall vacancy rate stands at 2.98 percent, down from last year, while the lease rate sits at $0.54 per square foot, up from the last quarter of this year. Total absorption of industrial space is currently 314,978, up from last year and last quarter. There’s more to come in the pipeline, with 5,349,340 square feet currently under construction. In the Kent submarket, total rentable square feet stands at 48,953,663, with 1,848,944 (3.78 percent) vacant. There are 126,914 square feet subleased, with the vacancy rate with sublease standing at 4.04 percent.
Due to solid underlying fundamentals, including strong tenant demand, supply constrained inventory and superior accessibility, the North Kent Valley is one of Seattle’s most sought-after submarkets, according to the recent statement released by HFF.