Seattle is the fastest growing big city in the country right now, which means land prices, building costs and rental prices are out of control. Warehouse rents are skyrocketing faster than anything around the Puget Sound according to a report by CBRE, a commercial real estate company. Rent for best in class warehouses and distribution centers increased 17% over the last year. While that may not sound like a lot, compare that to the global increase of just 2.2%.
Builders and developers can’t work fast enough to keep the median rent at a gradual uptick. We are an instant gratification society and companies want to be near growing population centers. Seattle is one such locale adding over 21,000 employees to Puget Sound region last year alone.
Companies such as Amazon is expanding beyond the Seattle metro areas to places like Sumner due primarily because of the added availability of space. The company leased a second warehouse totaling over 400,000 ft.² earlier this year. But space is not the only thing driving larger companies out of the Metro area. Close proximity to customers becomes a priority as well and as more and more people expand out beyond the Metro area, so must these larger companies.
The report also states that warehouse landlords in South Seattle working between $.60-$.65 per square foot just four years ago but now that same space is $1 a foot or more.
This has prompted one of the South Seattle’s largest project in recent years, Georgetown Crossroads, a rare, three-story distribution center totaling nearly 4,400,000 ft.² of space. In the past, we’ve only seen these multistory distribution centers in more land constrained places such as Europe and Asia.
International trade is also another industry market driver as the Northwest Seaport Alliance of Seattle and Tacoma reported container volumes increasing 13% from last year, the largest jump in more than a decade.
Naturally, apartments and residential buildings have also felt the rental increase, especially for those that need to live close to these workplaces. If you are in the market for a condo or residential space in South Seattle or anywhere close to one Seattle’s major companies, contact me. I know the area very well and am proficient in negotiating for the right property and the right terms to fit your needs.