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March 31, 2014

Pierce County holds lead in industrial development

Daily Journal of Commerce

Journal Staff

"Consistent and steady" is how the brokerage Kidder Mathews describes the first quarter for the region's industrial market, with strong leasing activity and a few big projects under construction.

The report lists eight projects under construction, mostly in Pierce County, totaling 2.08 million square feet. The three biggest are the Coho Building in White River Corporate Center in Sumner, a 649,000-square-foot space being developed by DCT Industrial Trust; IAC Port 167, a two-building, 650,000-square-foot complex in Puyallup being developed by International Airport Centers; and the Titan Building, a 306,000-square-foot structure in Sumner being developed by Panattoni Development Co. and LaSalle Investment Management.

Five projects totaling 882,982 square feet opened in the first quarter of the year. Tenants absorbed 902,454 square feet, dropping the vacancy rate from 5.95 percent at the end of 2013 to 5.83 percent.

In 2013 there were 152 sales worth $680.4 million, compared with 2012 when there were 177 transactions worth $907.1 million.

So far this year, sales have been slow with 28 transactions worth $69.2 million. There hasn't been a $10 million sale yet this year, Kidder Mathews reports.

Kidder Mathews expects rents to either remain flat this year or increase slightly, depending on the area.

Much of the positive momentum in the industrial sector could have been reversed with one decision. Kidder Mathews said the region gave a "big sigh of relief" when the Boeing machinists union approved a contract that clinched production of the 777x in Everett. Had Boeing taken the project elsewhere the report says there would have been a "great deal of anxiety regarding reductions in jobs," in the industrial market.

In addition to the industrial boom from Boeing, announced plans to build a 1 million-square-foot distribution center in Stryker Business Center at Pacific Gateway in Kent. This will be its fourth in the region.

© 2014 Seattle Daily Journal of Commerce

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