SEATTLE—JLL recently released its list of top 18 distribution markets. Markets from New Jersey, to Southeast Texas, to Florida and Minneapolis made the list. In addition, the Pacific Northwest market made the cut. In this exclusive Q&A, GlobeSt.com chatted with the firm's Casey Trees, VP of the Pacific Northwest on opportunities and hidden gem areas.
GlobeSt.com: Please describe one factor that makes the Pacific Northwest a top distribution market.
Casey Trees: The region's strong transport infrastructure is a key factor in its importance as a top distribution market. The container port network between Seattle and Tacoma—Tacoma alone handles 10% of the total tonnage on the West Coast—and its important rail connections are key parts of this infrastructure.
GlobeSt.com: What opportunities for industrial investors or tenants exist in the Pacific Northwest?
Trees: Broadly marketed portfolio and single asset sales are rare in the Seattle market and extremely competitive, driving CAP rates to sub-5.0% and pricing many investors out of the market. Those investors priced out, have found success by consistently offering on off market properties and building their portfolio a single asset at a time.
GlobeSt.com: What submarkets are hidden gem areas for distribution that many aren't talking about? Why should we be paying attention to them?
Trees: Fife. New construction projects in Fife are capturing shell rents in excess of $0.50 psf shell, comparable to pricing in the north Kent Valley submarkets. The location adjacent to the Port of Tacoma and access to I-5 is proving in high demand for new tenant activity.
GlobeSt.com: What distribution trends will we be talking about in your market at this time next year?
Trees: Multi-story warehousing. In the south Seattle market, with a vacancy of 1.6% and rents pushing towards $1.00 psf, NNN, there are indications that new development may be underway as soon as next year of this type of product which is new for this market.
SEATTLE—JLL recently released its list of top 18 distribution markets. Markets from New Jersey, to Southeast Texas, to Florida and Minneapolis made the list. In addition, the Pacific Northwest market made the cut. In this exclusive Q&A, GlobeSt.com chatted with the firm's Casey Trees, VP of the Pacific Northwest on opportunities and hidden gem areas.
GlobeSt.com: Please describe one factor that makes the Pacific Northwest a top distribution market.
Casey Trees: The region's strong transport infrastructure is a key factor in its importance as a top distribution market. The container port network between Seattle and Tacoma—Tacoma alone handles 10% of the total tonnage on the West Coast—and its important rail connections are key parts of this infrastructure.
GlobeSt.com: What opportunities for industrial investors or tenants exist in the Pacific Northwest?
Trees: Broadly marketed portfolio and single asset sales are rare in the Seattle market and extremely competitive, driving CAP rates to sub-5.0% and pricing many investors out of the market. Those investors priced out, have found success by consistently offering on off market properties and building their portfolio a single asset at a time.
GlobeSt.com: What submarkets are hidden gem areas for distribution that many aren't talking about? Why should we be paying attention to them?
Trees: Fife. New construction projects in Fife are capturing shell rents in excess of $0.50 psf shell, comparable to pricing in the north Kent Valley submarkets. The location adjacent to the Port of Tacoma and access to I-5 is proving in high demand for new tenant activity.
GlobeSt.com: What distribution trends will we be talking about in your market at this time next year?
Trees: Multi-story warehousing. In the south Seattle market, with a vacancy of 1.6% and rents pushing towards $1.00 psf, NNN, there are indications that new development may be underway as soon as next year of this type of product which is new for this market.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
