By Jack Stubbs
With steady 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.
The Kent Valley in particular—which ranges from Kent to Puyallup, and encompasses cities like Auburn and Sumner—continues to see investment in industrial properties, with another recent transaction an indication that interest in the Kent Valley’s industrial market remains.
Following up on its mid-April acquisition of two industrial properties in Puyallup for a combined $38.5 million, Boston-based real estate investment management firm TA Realty recently acquired another warehouse in Auburn for $25.5 million, King County records show. The seller of the property was San Francisco-based Stockbridge Real Estate, a real estate investment management firm that targets all major property types and operates throughout the U.S.
The subject property, a storage warehouse located at 2002 West Valley Highway N., totals 18,000 square feet and was built in 1991, according to public documents. The property shares the same address as the White River Industrial Park, which is a two-building, warehouse/distribution facility that totals 167,023 square feet, according to the description on Orchard Partners’ web site.
Sitting on roughly thirteen acres, the building is about two miles north of downtown Auburn and 1.5 miles from Auburn Municipal Airport. The building is also approximately twelve miles north of Puyallup and five miles south of Kent.
Since the company’s inception in 1982, TA Realty has acquired, invested in and/or managed over $30 billion of real estate on behalf of hundreds of U.S. and non-U.S. institutional investors and clients, according to its web site. This figure includes over 1,000 industrial, office, multifamily and retail investments located in approximately 35 markets throughout the U.S.
TA Realty’s recent capture of the White River Industrial Park property comes roughly half a year after the company made another large-scale acquisition in the Pierce County city of Lakewood. In mid-December 2018, the company purchased the 467,526 square foot Lakewood-Tacoma Gateway Logistics Center for $65.6 million, or approximately $140 per square foot, from Newport Beach, California-based Panattoni Development Company.
As of March 31st 2019, Stockbridge Real Estate and its affiliates had approximately $13.9 billion of assets under management across all major property types, according to the company’s web site.
The sale of the warehouse property in Auburn comes at a time when developers and investors alike are looking to implement new strategies when it comes to approaching the Puget Sound region’s evolving industrial market. Traditional owners and users of industrial properties, who used to look to occupy space closer to cities’ downtown cores, are moving further out, as constrained land inventory and rising rental prices continue to play a role.
As one notable example, San Francisco-based Terreno Realty was prompted to think ahead when considering such changes, especially with its revitalization of South Seattle’s 234,000 square foot SoDo Row Property, which was repurposed in an effort to attract a a wide variety of industrial owner-users who might not be able to afford a property closer-in to Seattle’s downtown core.
TA Realty’s capture of the warehouse in Auburn, and Terreno Realty’s repositioning of SoDo Row, are not the only statements of intent that have been made in the Puget Sound region’s evolving industrial market over the last couple of weeks. On June 3rd, New York-based Clarion Partners spent $81.1 million, or close to $147 per square foot, to acquire three warehouse/distribution buildings in Des Moines totaling 551,988 square feet from LaSalle Investment Management of Chicago.