By Meghan Hall
The Puget Sound industrial sector has remained the darling of the regional commercial real estate industry over the past several months, even as investors and economists have been closely watching fluctuating market fundamentals. Link Industrial Properties, Blackstone’s industrial affiliate, and Panattoni Development Company, an international development firm, are moving ahead with plans for Pacific Gateway Industrial Park, an 823,544 square foot complex in Kent, Wash. The firms announced that the project broke ground at the end of May.
Link Industrial and Panattoni closed on a deal to purchase the 53.6-acre site at the beginning of the year. The two companies paid Boeing—the former owner—about $60 million, according to public property records. The property was formerly used as a Boeing surplus yard and was one of the largest industrial transactions in the last ten years in Kent.
Project plans show that there will be six buildings on the site, ranging in size from 38,191 square feet all the way up to 342,206 square feet. Trailer parking is etched out in the plans and the buildings will have clear heights ranging from 24 to 40 feet as well as a mix of grade level and dock high doors. 588 auto parking stalsl are also included in the project plans.
“We worked with the Panattoni and Link Industrial teams to design the Industrial park to cater to smaller local companies but also have the flexibility for larger spaces that can attract the larger e-commerce types of companies,” said Taylor Hoff senior managing director with Newmark Knight Frank, the brokerage firm in charge of leasing the complex. Vice Chairmen Thad Mallory, Cam Warren, and Associate Blake Bentz are also a part of the leasing team from NKF.
Located at 20301 59th Place S., the property is closer to major the region’s major population centers than much of the development occurring further south in Pierce County. Directly adjacent to the site Amazon occupies two fulfillment centers, and Boeing occupies another building on S. 204th St. Columbia, HD Supply and Starbucks are also in the immediate vicinity. SEATAC is within a few minutes’ drive, and the Port of Tacoma is just seven miles away.
“This is the preeminent industrial development for the new decade for the entire region, and will lead the charge in the continued evolution of business in the Kent Valley and Greater Seattle region,” said Mallory.
During the first quarter of 2020, the regional industrial market was fairly active; there was seven million square feet of industrial space under construction, of which 31.7 percent was pre-leased, according to Kidder Mathews. In all, Puget Sound industrial inventory totals about 15.8 million square feet, with just under 242,000 square feet located in South King County, where Link Industrial and Panatonni are building. Vacancy in south King County hovered at about 5.9 percent, although Kidder Mathews expects vacancy to moderate, as nearly 2 million square feet of leases were signed during the first quarter, with occupancy expected to begin over the next nine months.