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April 25, 2017

Here's the latest big lease in the Seattle region's red-hot industrial market

Puget Sound Business Journal

Marc Stiles

A company that started in a Seattle basement 34 years ago will move into a big distribution center planned for Kent.

Classic Accessories has leased the 223,800-square-foot facility that will go up starting this month at 26600 72nd Ave. S., developer CenterPoint Properties said.

It's the largest new lease transaction in the Kent Valley so far this year, said Arie Salomon of NAI Puget Sound Properties, the real estate broker for Classic Accessories.

Larger deals have been done elsewhere in the region. UPS leased a 770,000-square-foot building in Tacoma, for example.

Seattle's strong economy is spurring the industrial real estate market to record-high rents and ultra-low vacancy rates. Rents are rising so fast that for the first time developers are not putting rates on marketing fliers.

"You have to call the brokers because the rent may change," said Salomon, who has been peddling industrial real estate in the region for 27 years.

Oak Brook, Illinois-headquartered CenterPoint Properties is among the developers building big projects. Across the region, where there is a total of nearly 285 million square feet of industrial space, 21 projects totaling nearly 3.4 million square feet are under construction, according to commercial real estate company Kidder Mathews' first-quarter report.

Another company, CBRE, reported that the average monthly rental rate of 65 cents a square foot is a record, and that the Kent Vally's vacancy rate of 3.6 percent is the lowest since 2000.

Classic Accessories began by making automotive accessories like seat belt pads, steering wheel covers and fuzzy dice. The company branched out and now makes all kinds of covers that protect items from patio furniture to RVs.

Classic Accessories was operating out of a 12,000-square-foot facility in Sodo's neighborhood about 10 years ago when Salomon helped facilitate a move to Kent. The company today occupies two Kent buildings totaling 114,000 square feet. Those leases expire at the end of this year, and the company is expanding.

It won't fill all of the new building and plans to sublease some of the space, with the amount to be determined, said Salomon, who put the deal together with NAI Puget Sound Properties colleagues Jeff Forsberg and Taylor Hoff.

CenterPoint's new development will have 36-foot-high clear heights, which is attractive to distributors for the extra storage volume. Salomon said it will be one of the few such buildings in South King County.

Classic Accessories has signed a 10-year lease. The rental rate was not disclosed.

Craft Architects of Seattle designed the building. Poe Construction will build it. Construction is expected to start this spring.

For the full story, go to Puget Sound Business Journal.

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