Puget Sound Industrial Figures Q1 2023

April 12, 2023 10 Minute Read

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  • The Puget Sound Industrial market plateaued this quarter due to inflation, interest rates, and uncertainty around consumer demand, though vacancy is still below the historic average.


  • Development pipeline numbers continued to fluctuate, partly due to development deliveries totaling 1.8 million sq. ft. in Q1 2023, though both the scarcity and high cost of land continues to push development further south to the Tacoma, Olympia, and Lewis County markets.


  • Kent Valley leasing volume slowed following a multi-year streak of high performance. Net absorption was low by historic standards, sitting at 279,717 sq. ft. in Q1 2023. Leasing volume is back on track, after a noticeable slowdown in the fall of 2022.


  • The Tacoma Industrial market had a slow start for Q1 2023—showing negative absorption for the first time since 2015. On a positive note, Harbor Freight agreed to a lease for a 782,875 sq. ft. build-to-suit at FRED310 Business Park in Frederickson.


  • Favorable demographics and modern new buildings have been drawing tenants to the Northend market for several years, but Q1 saw more expansions by tenants already in the area, than new ones.