By Meghan Hall
Competition for Seattle’s limited industrial supply has investors buying up property. In a deal that recently closed American investment management firm Fortress Investment Group purchased the current Macdonald Miller Warehouse for $14.325 million. According to public documents, the seller was Gig Harbor, Wash.-based F&V Investments LLC.
The asset is located at 7707 and 7717 Detroit Ave. SW. 7707 Detroit is the smaller of the two parcels, according to King County data. The lot is developed with a 1998 masonry structure and is just under 2.6 acres. 7717 Detroit is far larger. While developed with a roughly 30,000 square foot warehouse, the property totals about 13.9 acres.
7707 and 7717 Detroit Ave. are easily accessible via State Routes 509 and 99, and are just a short drive from downtown Seattle. Close to the Duwamish Waterway, the properties sit in a highly commercial part of town, near other warehouse users and industrial businesses.
The property is currently occupied by MacDonald Miller Solutions, a full-service, design build mechanical contractor. The company has ten locations and more than 1,00 employees across the Puget Sound.
It is unclear whether or not Fortress Investment Group plans to redevelop the property in the future. A diversified investment manager, Fortress Investment Group had about $52.7 billion worth of assets under management at the end of 2020.
The Puget Sound’s industrial market was off to a hot start at the beginning of the year, with the region tallying up more than $450 million in trades during the first quarter alone. According to recent data released by brokerage firm JLL, investors are “eager” to deploy capital, and significant amounts of dry powder are waiting on the sidelines as potential buyers seek out investment opportunities.
“With strong momentum from the second half of last year, 2021 is setting up to be a record-breaking year throughout the Puget Sound industrial market,” states JLL in its report. “The proposed construction pipeline is at an all-time high, e-commerce is still expanding, rents continue to push upwards, and investors across the nation are looking to capitalize on the feverish pace of the Seattle market.”
During the first quarter, more than 13 million square feet of developments were announced, and 2.8 million square feet was pre-leased. Among developments currently in the works include NorthPoint Development’s 4.15 million square foot industrial park in Arlington, and Panattoni’s five-building, 2.8 million square foot project, also in Arlington. Bridge Development Partners is also pursuing a number of projects in the area, making its mark on the region.
Despite new construction, vacancy region-wide remains at 4.9 percent, and direct asking rents are about $0.84 per square foot. These fundamentals will continue to attract new investors and developers who are looking to take advantage of the market before it is too late.