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5 Industrial Market Trends You Need to Know Now · Industrial Advisors

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  If you build 100 to 200 in any one of those North Valley
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  markets, Renton, Tukwila, Kenton.
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  A brand new building.
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  They're going to lease, they're going to lease quick, they're
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  going to lease at great rates.
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  So there certainly is a flight to quality.
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  Yes.
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  Yeah.
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  In that region.
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  Yeah.
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  Yes.
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  Welcome to our industrial advisors podcast built on to the Matt McGregor.
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  We've got a five minute Friday today.
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  We have market trends and there's five things that we wanted to cover.
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  Let's kind of jump into it.
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  Where should investors, landlords and tenants be paying attention right now?
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  Right.
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  So the first thing we want to talk about was Fredrickson.
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  There's been a bit of a slowdown.
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  Yeah, it happens.
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  You know, it happened in Sumner too, but it is a big change.
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  So.
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  The inventory F Fredrickson has been the number one absor absorption
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  market overtaking sub over the last couple years, and it's slowing down.
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  We went from 2020 of an inventory of six point, we call it 4 million
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  square feet to now about 12 million.
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  That's a quick build, but the interesting thing is the lease up
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  is taking a lot longer the vacancy.
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  Ranged between those years, those were COVID years, 4.
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  7, 5. 3, 1. 5, 1. 5, and now 9%.
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  So it went from 1.
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  percent in a year.
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  And product is sitting.
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  Yep.
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  Like, uh, I think a total of 1.
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  Uh, just under 7 million feet setting 1.
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  7 of 100 plus.
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  Yeah.
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  The thing about that market is most in most in one asset.
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  Correct.
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  And that market can change really quickly because a 700, 000 square
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  foot deal gets done and then, you know, everything's cut in half.
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  Yeah.
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  So, yes.
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  And then that is a, you know, we've talked Frederickson before proven
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  market, great big tenant market, uh, labor, everything's good there, but
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  certainly a trend in the wrong direction.
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  But it's one of our.
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  Five trends.
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  We're going to talk about that is a significant change.
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  It's also a trend of what we're seeing in the market of the bigger,
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  the building, the bigger, the vacant, the larger, the vacancy.
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  The next thing we want to talk about was multi story industrial in Seattle.
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  And we'll give you an update on three projects.
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  So track six as is a 210, 000 square foot project that is
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  only about 28 percent leased.
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  Okay.
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  So you have 72 percent vacant that was delivered in second quarter of 2023.
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  The next one is 65 South Horton street.
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  That's a 146, 000 square foot building, that is entirely vacant still, that
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  was also delivered in Q2 of 2023.
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  And then, of course, Seattle Metro Logistics, which is a
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  702, 000 square foot building.
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  Beautiful project, delivered in Q3 of 2024.
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  That is 0 percent occupied right now, so 100 percent vacant.
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  That one surprises me.
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  I keep thinking that's going to get leased.
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  Great building.
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  Uh, unique building.
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  Yep.
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  Yep.
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  Talk about the lack of product as our next one in the, in the
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  north end of the, of the market.
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  So, kind of north Kent Valley.
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  Yeah, Kent Valley.
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  So, when we say lack of product there, lack of new product,
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  because here's the deal.
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  The new developments in that Kent up to the airport have
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  done phenomenally well, okay.
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  And there's nothing under construction in that Renton Kent
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  area, Renton Tukwila Kent area.
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  Justin and Bridge just finished the 300s up at SeaTac, those old leases.
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  Those areas have rocked.
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  And there's a lack of projects.
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  And I would say developers need to find some dirt.
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  That's right.
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  That is, all the projects there, even in a market when it's, like you look
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  at the 100 to 200 right now, right?
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  It's slow, okay?
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  Or there's a lot of vacancy.
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  If you build 100 to 200 in any one of those North Valley
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  markets, Renton, Tekwila, Kenton.
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  A brand new building.
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  They're gonna lease, they're gonna lease quick.
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  They're gonna lease at great rates.
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  So there certainly is a flight to quality.
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  Yes.
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  In that region.
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  Yeah.
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  Yes.
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  Yes.
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  I, I, I agree.
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  And I would, I would say even in South Seattle, first story, not getting into
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  the multi story, but first story has done pretty well too, a new product.
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  Yeah.
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  Give me the, give me the North Kent Valley.
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  Yeah.
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  North Kent Valley to the South end of Seattle.
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  Yeah.
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  You bet.
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  You want to talk leasing activity?
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  We mentioned it.
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  Well, the final one of a trend, and we keep hitting on this on every podcast,
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  so let's not spend a bunch of time on it.
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  One to 200.
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  Continues to go up in vacancy up in the number of available properties.
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  Yes That's unfortunately that that trend continues.
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  So don't build into it, please There's four that are under construction
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  unless it's in kent That area right sequoia rents and kent.
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  Yeah, and the airport markets.
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  Yeah.
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  Yeah, that's right Yeah, and and you know, you're seeing landlords get creative
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  on how to lease those buildings up.
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  That's right Yeah, so some market trends to pay attention
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  to we'll continue to track them.
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  Uh, thank you for listening to our Five minute Friday.
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  Thank you very much.