By Meghan Hall
Prologis is expanding its holdings in Auburn, a submarket known for its industrial assets. In a transaction that closed at the end of July, Prologis purchased just under nine acres along West Valley Highway S. for $9.578 million. The sellers were Floyd and Doreen Hunt of Auburn.
The acreage is currently zoned for single-family residential uses, according to King County parcel data. Prologis purchased two parcels; the first, of which totals 5 acres and is developed with three-bedroom, one-bathroom single-family home built in 1946. The second parcel is slightly smaller, at 3.82 acres. It is currently developed with a three-bedroom, 1.5-bathroom home originally constructed in 1922.
The properties are only about a seven-minute drive from Prologis Park Auburn, an 84,251 square foot industrial facility constructed in 2008. Prologis has also been extremely active further north in Tacoma, where it has constructed and leased 500,000 square feet and 90,000 square feet to Amazon and Home Depot, respectively, as part of its Georgetown Crossings project.
It is unclear what Prologis is planning to do with the properties long-term; in April, the San Francisco-based firm stated that it planned to stop all speculative development around the globe in response to coronavirus. As of April, Prologis had 30 built-to-suit projects in development, eight of which had been halted due to local jurisdictions and shelter-in-place orders. However, the real estate investor still has commingled funds seeking investments throughout the United States and beyond.
Industrial vacancy rates in South King County increased to 6.4 percent, compared with 5.9 percent during the first quarter, states Kidder Mathews in a recent industrial report. The increase in vacancy is due to a negative net absorption of 429,281 square feet, and one project delivery, totaling just over 77,000 square feet. There are, however, 1.99 million square feet of signed leases with expected occupancy over the next nine months, which Kidder Mathews believes will help ease rising vacancy rates. In South King County, there is also about 370,000 square feet of industrial under construction, the largest of which is Bridge Point Auburn 200. The project totals 206,155 square feet.
Kidder Mathews notes that the industry still could be impacted by port volumes and disrupted supply chains, and that vacancy in the coming months will likely continue to increase. Spikes in coronavirus cases could also slow the industry, if shelter-in-place orders once again become necessary.