On July 11, NAIOPWA held our monthly breakfast meeting at the Georgetown Ballroom to learn about the future of urban industrial and take a field trip to the nearby Prologis Georgetown Crossroads, the first multi-level distribution center of its type.
President Tony Toppenberg kicked off the meeting by thanking our breakfast sponsor, Sierra Construction, and our stellar group of annual sponsors. We sincerely thank them for their involvement.
We also heard about the annual Community Enhancement event that will occur on October 6 at St. Bernadette’s Parish School in Burien. We look forward to this fun and productive day of work!
The Summer Property Tour is fast upon us. We will be doing a tour of the Pike Place Market. Food, drinks, fun and education are on tap for this tour which will take place on July 19.
Mike Wood from Norris, Beggs, & Simpson introduced our esteemed panel. They included:
- Richard Kolpa – Senior VP and Market Office – Prologis
- Thad Mallory – Senior VP – Kidder Mathews
- Matthew Bean – VP – Terreno Realty Corporation
Thad started off with a general overview of the industrial market in Puget Sound. There are four major hubs for this:
- South Seattle
- N. Kent and Tukwila
- Pierce County
- South Sound – Lacey and points south (a new market )
Pricing has been on the increase for industrial real estate. Specifically, here is a comparison of rental pricing in 2007 and today:
- South Seattle - $.55/sq ft in 2007; $1.30 to $1.50/sq ft in 2018. Vacancy rate ~1%.
- N. Kent - $.40/sq ft in 2007; $.70 to $.80/sq ft. Vacancy rate ~2%.
- Pierce County pricing is a little lower than North Kent.
Matt Bean then gave an overview of Terreno Realty and specifically talked about the old Sears Warehouse on 1st Ave South and the proposed redevelopment of that property into a light industrial center.
Richard gave us an overview of the Prologis development that we toured. It is a three-story building which is unique for an industrial-type property in our area. Rich indicated that this type of building is becoming more common in China and Japan. Completion date is early autumn of 2018. The first two floors are somewhat conventional in that they are high clearance and designed to accommodate 53’ containers. The third floor is very modular and is designed to accommodate:
- Maker/light industrial
- Creative design
- Common meeting rooms (tenant amenities)
Rich added that 20% of new deals in the Seattle area have to do with e-commerce. Not surprising!
Our panel took questions from the audience and then we toured Rich’s property. The property tour began in the leasing/marketing job shack on-site, which includes an extremely detailed mockup of the completed project which in itself cost $30,000 to produce. Wilma Warshak with Washington Real Estate Advisors was on site to discuss the project. The attendees then were able to walk up one of the ramps to the second level where Kathy Craft with Craft Architects, whose firm designed the project, provided a further overview of the project. We thank both Wilma and Kathy for their participation in the property tour.
As with most things, in the urban industrial market, change is the only constant! We thank Rich, Thad and Matt for their insights.
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This article was written by NAIOP Washington State and Programs Committee member Edward Scherer, Account Executive, Avidex Industries, LLC.