By Meghan Hall
San Francisco-based real estate investment trust Prologis has made another acquisition in Seattle, adding to its Puget Sound portfolio. According to public records, Prologis acquired a Nissan Dealership for $18.425 million from Nissan North America in a transaction that was finalized at the beginning of October.
The property is located at 3412 Airport Way South, and King County records show that the property totals just under an acre. No new plans to redevelop the property are currently on file with the Seattle Department of Construction or Inspections.
The asset sits at the confluence of two major thoroughfares: Interstate 5 and the Spokane St. Viaduct. Jefferson Park, the VA Hospital, and Seattle’s rapidly growing Industrial District are all also located nearby.
Prologis is viewed by many as a global leader in logistics real estate. Historically, the firm has concentrated on high-barrier and high-growth markets. At the beginning of 2021, the company announced it had completed $25 billion worth of investment activity on an owned and managed basis.
As the Puget Sound has grown, so has Prologis’ local portfolio. According to the company’s website, Prologis owns 19 assets across the Puget Sound, from Sumner to Seattle. The company’s portfolio includes Prologis Park Seattle,Prologis Park Tukwila 5, Prologis Park SeaTac, and Prologis Kent, among others.
In March of this year, the firm acquired a parcel in Edgewood, Wash., for $16 million. Prologis has submitted an application to rezone 20.5 acres from single-family residential to industrial uses in its anticipated development of the site. In June of 2020, Prologis acquired another property at the heart of Tacoma for $33.5 million. The asset, located at 1640 E Marc Street, is currently occupied by McFarland Cascade.
The Puget Sound’s industrial market has been on a “hot streak” according to reports, continuing to build on another record-breaking year.
“The industrial real estate market was already booming prior to the pandemic, but the resultant disruption of the global supply chain has pushed demand to new heights,” explains a third quarter report released by brokerage firm Newmark. “Amid supply chain challenges and the explosion of consumer demand for ecommerce, companies have begin to reassess the stability of their inventories, resulting in an increased need for warehouse and distribution centers.”
The Puget Sound’s industrial inventory currently stands at 307 million square feet, and vacancy sits at 4.3 percent. An additional 11.7 million square feet of space is currently under construction. Quarterly net absorption totaled 2.81 million square feet. Average asking rents in the region have increased 5.6 percent year-over-year to $10.62 per square foot triple net.
With demand at all-time highs and supply struggling to keep up, Newmark predicts that the industrial market will remain strong with record-high absorption through 2021. The momentum gained now, notes the brokerage firm, will continue to push the market in a positive direction for at least the next few years.