Warehouse construction is booming in Pierce County. New real estate report shows how much
A new report from real estate firm Kidder Mathews shows Pierce County leading the way when it comes to regional warehouse development.
Of the industrial construction activity in the Tacoma-Seattle area, 72.6% of the construction activity is in Pierce County with the start of Bridge Point Tacoma 2MM, according to Kidder Mathews’ industrial market third-quarter review.
Pre-leasing at industrial sites is at 47.3% with 96.4% of those leases located in Pierce County projects, the report stated.
Notable leases for the period in Pierce County include 782,875 square feet at FRED310, Building E, in Frederickson, leased by Harbor Freight Tools, and 435,791 square feet leased by GE Appliance at FRED310, Building D, Frederickson.
The Harbor Freight site broke ground last year.
Most of Phase 1 space at the sprawling campus is spoken for. Building C, still under construction, is set for Floor & Decor at over 1.1 million square feet.
Approximately 318,00 square feet of Building D is available to lease along with all of Building G (611,206 square feet).
Phase 2 comprises two smaller buildings totaling almost 540,000 square feet. The second phase is under construction with the first building slated to be completed in January 2025, according to a media representative for Panattoni.
The representative told The News Tribune this month that the first three “south” buildings are completed, with spec offices in D and G.
The nearly 310-acre industrial-campus project is a joint venture between Irvine, California-based Panattoni and a real estate fund advised by Crow Holdings Capital of Dallas.
The site is near Canyon Road East and East 176th Street in Frederickson, and the land was purchased from The Boeing Co. in 2021 for $200 million.
Panattoni this summer also announced plans with Brookfield Properties on a new two-building industrial park in the Tehaleh master-planned community outside Bonney Lake.
The report noted that the development deal was “an outlier, as sales of tertiary sites have been frozen for the last two years.”
The Kidder Mathews report also stated that the county “has seen 3.1 million square feet added year to date, to bring the inventory to 99.7 million square feet.”
It added, “Vacancy stands at 8.4%, up 43 basis points from Q2 and 341 basis points over year end 2023..”
It also noted Bridge Point Tacoma in South Tacoma, currently under development, is 40 percent pre-leased.
The multi-building project has faced consistent opposition from neighbors and other groups over a multitude of issues, including concerns stemming from the construction itself, increased traffic, pollution and environmental concerns tied to its history as a Superfund site.
Kidder Mathews’ report noted that at 2.5 million square feet, the project represents nearly half of the 5.4 million square feet currently under construction in the county.
It also reported that 16 sales closed in the third quarter, totaling $80.3 million, with the average price was $214 per square foot.
Among the sales, Sumner-based Penny’s Salsa and Fresh Produce purchased its facilities from Davis Property & Investment and Highmark Investments at the end of August for $10.5 million. Pacific Heating and Cooling purchased its Tacoma-Lakewood area building from a local investor in July for $9.5 million.
Kent-based DPI, in a release this summer touting the sale, noted that the site for Penny’s Salsa was built in 2017. The site, known as Sumner North 140, “is a 60,375-square-foot build-to-suit facility for Penny’s Salsa with extensive freezer, cooler and food processing improvements.”
Over the past five years, DPI has completed construction and renovation projects totaling over 930,000 square feet, it noted in the release. It owns-manages nearly 5 million square feet of commercial real estate assets across the Puget Sound region, with over 97% leased.
After purchasing the former building site of The News Tribune in Tacoma in August 2021, DPI redeveloped it into the current Tacoma Central Logistics center, 1950 S. State St.
Jeff Davis, principal with Davis Properties, said in the Aug. 30 release that the sale to Penny’s “allows us to reharvest capital into our existing portfolio and pursue new development opportunities aligned with our strategic growth plans in the Puget Sound market. “
News Tribune archives contributed to this report.
This story was originally published October 16, 2024 at 5:30 AM.
