Seattle Commercial Real Estate has started 2024 with a look at office, retail, and multifamily real estate markets and now it is time to look at industrial real estate. The first element we need to look at is the availability of developable property in the GSMA (Greater Seattle). With our geographic restrictions of water on the West and mountains on the East, add in wetlands and zoning issues and, quite clearly, we are supply-constrained. However, industrial real estate in our area has achieved a high ranking…as having the third-highest construction cost in the West. Some relief on the demand side is a function of Amazon pulling back on some projects, but that is viewed as a blip.
Looking East For Future Industrial Development
The industrial market has softened. For the first time in years, Seattle Commercial Real Estate can drive through the South Seattle industrial base and find lease signs and actual vacancies. The better news is that the City of Seattle has unanimously enacted legislation to preserve and protect industrial-zoned parcels from housing development. This has done nothing to create more land to service Puget Sound ports. However, there are huge developments of cold storage facilities just east of the mountains in Ellensburg. Ellensburg is only a couple of hours outside of Seattle and when compared with the congestion of driving Interstate 5 and Ellensburg having a major North/South freeway, huge hub distribution facilities in this location are clearly the future.
Seattle’s Industrial Real Estate is Connected to the CBD
Seattle Commercial Real Estate feels strongly that the strength of the industrial base is experiencing only a short-term adjustment. When there is a return to health and the employment base increases in the CBD, the need for supportive services and the proximity to the employment base will have a favorable impact. Seattle Commercial Real Estate feels that if an opportunity to buy comes around, this would be a good time to consider investing.
