Seattle-Tacoma Industrial Market Report

Multiple factors interrupt strong streak of improving tenant demand. After nearly 19 million square feet of industrial space was absorbed on net from 2020 to 2022, roughly 2 million square feet was relinquished last year. While several of the elements behind 2023’s correction — including lower container traffic at local ports and elevated local inflation — will improve this year, ongoing speculative arrivals will keep vacancy elevated in 2024. Development is concentrated in the Northend and Tacoma. The former area was the sole submarket to post positive net absorption last year, suggesting the four unclaimed distribution facilities underway in Maryville Corporate Center are warranted long term. Tacoma, meanwhile, continues to boast the market’s lowest average asking rent, a potential boon for tenants amid elevated operating costs. Construction here is defined by four buildings underway in the FRED310 complex in Puyallup. The former tenant at that facility, Boeing, is also committed to moving into more than 1 million square feet across the market later this year, helping lift overall net absorption back into positive territory for 2024.