By Meghan Hall
With employment growth and the continued expansion of e-commerce companies like Amazon, industrial warehouse space around the Puget Sound is increasingly attracting big-name investor interest. With strong regional fundamentals, Newport, Calif.-based TA Realty is expanding its portfolio and has purchased two industrial properties in Puyallup, Wash., for a combined $38.5 million, according to Pierce County public documents.
The two properties are adjacent to one another on N. Levee Rd.; the larger transaction, located at 901 N. Levee Rd., was sold by Sumner, Wash.-based Evergreen International Holdings, an entity associated with Scott Huang. The property was sold for $16.3 million. The second property, located just next door at 919 N. Levee Rd., was sold for $10.8 million by GSR Investments, another limited liability company associated with Huang.
Both buildings currently serve as the headquarters for SeaTac Packaging Manufacturing Corporation, an independently-owned and operated design and manufacturing company founded in 1994. According to the company’s website, SeaTac Packaging specializes in graphic design and printing services, as well as customized inventory and warehousing programs.
Since 2015, industrial rental rates in Pierce County have steadily grown, with the average asking rent rising from $0.46 per square foot to $0.64 per square foot over the past four years, according to Kidder Mathews’ 2019 First Quarter Industrial Market Report. The county’s forecast for shell rates ranges from $0.55 to $0.65 square foot triple net, with industrial building sales prices expected to range from $140 per square foot to $185 per square foot for smaller or new construction buildings in the coming year. Second generation buildings, states Kidder Mathews, will garner less at approximately $50 to $100 per square foot.
Additionally, construction activity in Pierce County will remain robust over the course of the next year, as Pierce County alone accounts for 60 percent of the region’s industrial product currently under development. The largest project is DuPont Corporate Center Building A at 1.1 million square feet, followed by Dupont Logistics Center Phase II at 628,640 square feet. Frederickson Pacific Industrial Park’s built-to-suit for Best Buy will total 450,000 square feet, while The Viking and DCT Blair Distribution Center are slightly smaller at 438,065 square feet and 428,228 square feet, respectively. All of these buildings will be delivered during the next two to six months, and 32 percent of the space under construction is leased according, to Kidder Mathews.
TA Realty focuses on private real estate investment throughout the United States and has acquired, invested and/or managed $28.2 billion of real estate through value-added, comingled funds and core separate and advisory accounts since its establishment in 1982. As of September 2017, states it website, its gross assets under management were valued at approximately $10 billion, and comprised of 43.1. million square feet of office, industrial and retail assets as well as over 8,135 multifamily residential units.