Constraints on industrial development arise in the Puget Sound as availability remains limited
Out of the 15 largest industrial markets in the nation, the Puget Sound is tied for the third lowest vacancy rate.
September 03, 2019
- Out of the 15 largest industrial markets in the nation, the Puget Sound is tied for the third lowest vacancy rate. Limited availability is being driven by land constraints, population growth, the rise of e-commerce and an increase of volume at the ports in both Seattle and Tacoma.
- Add to this, select municipalities in the Puget Sound region are moving to limit development. Recently, the City of Kent established an interim moratorium on industrial developments, delaying multiple projects in the valley. Future buildings are restricted to one dock door per 40,000 square feet and limited to a footprint of 125,000 square feet. The city states the trucking-intensive land used for heavy distribution and freight movement has caused significant negative impacts to infrastructure, public costs and transportation to Kent and the surrounding cities.
- In King County specifically, supply is particularly constrained, and so tenants are looking further south into Pierce and Thurston County for availabilities. Both counties provide tenants with a bit more room to attain scale.
- The Seattle and Tacoma ports, collectively known as the Northwest Seaport Alliance, combine to make the 4th largest port in the nation. With little to no construction in the port’s vicinity, demand for space close to the ports will continue to keep vacancy at a historical low rate.
Source: JLL Research