Due to a pair of large tenants leaving spaces in the Kent Valley, the Puget Sound industrial market experienced negative absorption for the first time in eight and a half years, ending Q1 down 199,188 sq. ft. in net absorption. As a result of core submarkets reaching rental rate peaks and record-low vacancies, some businesses are turning to less mature submarkets in order to find spaces that meet their size and pricing requirements.
Leasing activity and construction signal that the Kent Valley is still robust, with Wilmar signing on for 245,000 sq. ft. at Pacific Gateway Kent and Pacific Plumbing Supply leasing 123,280 sq. ft. at 2601 West Valley Highway North in Auburn. There is over 1.5 million sq. ft. of new space under construction in the market. This will help provide the modern, large spaces that have become so scarce in recent years.
Currently there is almost 3.4 million sq. ft. of construction in the Tacoma-Fife submarket, more than any other market in the Puget Sound.
Throughout the Northend, only six spaces over 50,000 sq. ft. exist or are under construction. The market is at an all-time low vacancy of 3.3%.