Good industrial sites are hard to find in South Seattle, so Prologis' $136 million acquisition of 62 acres near Boeing Field has people talking.
Dan Letter - managing director, capital deployment for Prologis' Northwest Region - shared how the deal came together and fleshed out plans for another big Prologis project: a rare, multi-story warehouse on the north end of the First Avenue South Bridge.
Both projects are key to Prologis' urban infill strategy in Seattle, where the distribution center developer has bought 11 assets over the last two years and now owns around 15.3 million square feet.
Letter declined to say how much the acquisitions cost, but public records show it was $307.6 million.
A super-hot market is spurring this investment in the close-in market, where the vacancy rate has tumbled from 3.3 percent three years ago to just 1.4 percent at the end of September, according to real estate company Kidder Mathews.
Tukwila-based Sabey Corp. sold the 62 acres where Unified Grocers occupies two big warehouses. Sabey, who once toyed with building a professional sports arena on the property, didn't market the site for sale. Instead, Prologis built on its relationship with the company and made an offer, Letter said.
He declined to say how long Unified's lease runs or when the Prologis might redevelop the property, but said the developer looks forward to "offering this property and potential redevelopment to local customers in the near future." Letter said Prologis could build many smaller buildings or a few big ones.
Prologis plans to start building a three-story, 580,000-square-foot project by the First Avenue South Bridge during the first half of next year. None of the space has been pre-leased.
"It'll be the first multi-story, conventional building we've developed in the United States," Letter said.
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