By Meghan Hall
A number of major industrial leases have the Puget Sound’s local market off to a quick start in 2021. Following on the heels of a difficult 2020, a number of leases—almost all of which are greater than 100,000 square feet—have been signed in recent weeks as both local and national companies look to grow.
“Despite mixed results on the economic side, the region’s industrial market continues to be solid,” states Kidder Mathews in its most recent industrial report, released at the end of 2020.
Between March and April, unemployment spiked to 16.6 percent as the region lost 315,000 jobs. Over the course of 2020, the region regained 210,700 jobs with the unemployment rate lowering to 5.1 percent in November.
Leasing activity was higher during the fourth quarter, with 2.7 million square feet absorbed by companies throughout the region. Many of the leases recorded by Kidder Mathews during the end of the year were greater than 100,000 square feet. PCC Logistics took 322,345 square feet of space at 1525 E D Street in Tacoma, owned by Industrial Realty Group. Over in Kent, Lineage Logistics signed up for just under 180,000 square feet at Springbrook 188, while Filson, a clothing retail company, took 126,028 square feet at Van Doren’s at 228th.
Coastal Pacific Food Distribution signed a lease for more than 170,000 square feet at the Fife Corporate Center and Article took Portside 55’s Building C, which totals 168,150 square feet.
In other recently reported leases corporate transportation firm TransWest executed a 212,000 square foot lease at a SODO asset owned by REDCO Development.
“Fortunately, we continue to see rates increase across a variety of product types. New highwater marks are being set daily…even in a COVID-19 environment,” explained REDCO Development’s Jason Freise. “SODO locations are getting snapped up by a variety of users, from small to large. REDCO’s experience isn’t unique, many are seeing the benefits of the market as tenant demand remains strong and not a lot of available options.”
Other significant leases include Shift, a car buying platform, has signed an 83,863 square foot lease at Prologis Park Seattle-Portside, as well as Amazon, who leased 470,000 square feet at Black Creek Group’s Lakewood Logistics Center II. Amazon has 7million square feet leased or committed and possibly looking for more space, states Kidder Mathews.
And, according to industry reporting, Tesla could also become Amazon’s neighbor at the Lakewood Logistics Center and is in talks to take 206,000 square feet.
Combined, the leases show plenty of activity in the market, despite concerns about the economy and the potential impact Boeing’s recent struggles could have on the wider market. At the end of 2020, the region recorded 2.7 million square feet of positive net absorption and there are nearly 4.3 million square feet of leases signed and tenants gearing up to move in in the next nine months. Vacancies could increase as Boeing cuts down production, but many firms are still eager to make their mark on the region.
“Seattle fortunately has a huge presence of other industries that continue to need a highly skilled employee base and top-quality facilities…,” noted Freise. “I believe its these other industries that will be the beneficiaries of Boeing’s decision.”
Proximity to a health employment base, demand from large logistics users and already tight supply will continue to drive the market heading into 2021, with experts hopeful that true recovery is on the horizon.