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Market Report

Seattle-Tacoma Industrial

Second Half 2019

More Tenants Seeking Lower Costs Outside of Core; New Inventory Draws Institutional Buyers

 

Rising rents in core have some tenants seeking more affordable space. The average asking rent resting above $13.88 per square foot in the Eastside and city of Seattle has some firms that are not tech or e-commerce related moving farther from the metro core for lower rates. South King County and Pierce County may be beneficiaries of these relocations in the year ahead as new inventory has increased the amount of available space in these submarkets. In addition, these areas post the lowest average rent in the metro and benefit from access to the airport and ports in both Seattle and Tacoma. In recent years, construction has been concentrated in these two submarkets, a trend that will hold in 2019, although the deliveries in the Northend submarket will increase substantially to roughly 1 million square feet. The city of Woodinville will receive over half of this space. In downtown Seattle, the nation’s first multilevel warehouse was completed at the end of 2018. The 590,000-square-foot three-level building will soon be fully occupied as Amazon recently inked a lease for 500,000 square feet. Home Depot is the facility’s other occupant. Looking ahead, an increase in speculative development will nudge vacancy up and temper rent gains in 2019.

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