In a recent article we discussed the demand for industrial property close to the Central Business District of downtown Seattle. This premise was never made more clear than when Jorgenson Forge announced that they we ceasing to do business and that they would sell their 22 acre property located in Tukwila. Over 100 people will lose their jobs, but the big winner is the owner of the business. When the value of the land exceeds the profits of the business, that is indicative of a strong market.
An article in the Puget Sound Business Journal noted that in the first quarter of 2018, 507,600 square feet of industrial space was delivered in Puget Sound. The entire market has a vacancy factor of 3.3%. Close-in Seattle is 1.6%, South King County is 4% and Snohomish County is 4.5%. The big surprise is Pierce County. They are at 2.7% (up from 2.2%). The needle is clearly pointing south in terms of industrial development.
Seattle Commercial Real Estate is clearly engaged in industrial real estate and is searching for acquisitions for several clients looking for small industrial space. Most want Seattle. A house in Ballard, industrially zoned on a small (4,600 sf lot), sold for $799,950 – $174 per square foot for the land and at a cap rate of 1.9%. It is hard to justify this as an economic investment, but it is also a viable option in our world today. Hang on, Seattle, the ride is not over yet.