By Meghan Hall
Indianapolis-based Duke Realty is continuing to build its Puget Sound portfolio, buying up property in the quickly growing submarket of Kent, Wash. In a deal that closed on October 16th but only recently recorded, Duke purchased a site currently utilized by Sawdust Supply for $23.577 million. According to public documents, the seller was 74th Avenue Property LLC, affiliated with Marlene Matheson of Tukwila.
The asset is located at 7409 and 7421 S 202nd Street. King County parcel data shows that the property totals just over five acres and is zoned for single family uses. It is unclear what Duke’s plans are for the property at this time.
Established in the 1970s, Duke Realty specializes in constructing and managing state-of-the-art bulk warehouses and modern distribution centers. Duke has been steadily increasing its presence throughout the Puget Sound. During the third quarter, the REIT purchased West Valley at South 212th from LA-Z Boy for $13.485 million, or about $212 per square foot. The property is also located in Kent.
While still not up to pre-COVID-19 levels, the Puget Sound industrial market saw improvements over the course of the third quarter, with unemployment decreased to 7.9 percent. The industrial market has a bit of a mixed future, notes a recent report from Kidder Mathews, as entities such as Boeing and the Northwest Seaport Alliance face barriers to trade and production. Other sectors, such as e-commerce, have continued to thrive, a positive for investors such as Duke.
However, throughout the region, there is more than 10.1 million square feet of industrial space under construction, 30 percent of which is pre-leased. Across the South end, where Kent is located, vacancy decreased to six percent with a net absorption of 420,956 square feet. An additional 1.14 million square feet worth of signed leases with expected occupancy over the next nine months should decrease vacancy. In another bright spot, sales volume has been relatively stable, with $423 million of transactions by the end of the third quarter.
Looking ahead, there will be a number of factors to watch, states Kidder Mathews. How the region will respond to Boeing’s consolidation, as well as supply chain disruptions, could have an impact. Additionally, spikes in new COVId-19 cases could prompt more businesses to close again as local officials grapple with the current global health crisis.