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Shein, a leading fast-fashion and e-commerce company based in Singapore, has announced the opening of a new office in Bellevue's downtown area, occupying nearly 10,000 square feet at Key Center in the Central Business District. This move aims to enhance Shein's U.S. fulfillment and logistics, potentially speeding up delivery times for its American customers. The Bellevue office, part of a 488,000 square-foot tower owned by Kilroy Realty, marks a significant step in Shein's U.S. expansion. This expansion is seen against the backdrop of the company preparing for a possible U.S. stock exchange listing and amid scrutiny over labor practices. Shein targets a younger audience with affordable, trendy apparel and is on a hiring drive, expecting to have 50 employees in Belleville by the end of the year. With a U.S. workforce exceeding 1,500, the company emphasizes efficiency and small-batch production to keep costs low. Shein's arrival in Bellevue is viewed positively for the local office market, which has faced challenges, including rising vacancy rates. This development, alongside expansions by TikTok and Pokémon, is seen as a potential positive shift for Bellevue's commercial real estate and local economy, contributing to its growth as an innovation hub. Commentary from Dominic Vinti, SMARTCAP's Senior Acquisitions Analyst Shein has signed a new 10,000 SF ease in downtown Bellevue at the Key Center. The leased space is set to house Shein's U.S. Fulfillment and Logistics operations. Plans are to have roughly 50 employees in the new space by the end of the year. The lease comes on the heels of TikTok's expansion also in the Key Center. These are both positive developments in the office and industrial sector. Both respective offices for TikTok & Shein chose Bellevue to target and poach talent away from e-commerce and logistics giant Amazon. The aim of the companies is to build up their fulfillment portfolio for better delivery times for U.S. based clientele, much like Amazon did over the last decade. Shein already has flagship fulfillment leases in Los Angeles, Philadelphia, and Washington DC. While it will be an uphill battle to match up against Amazon's mature fulfillment network in terms of efficiency and accuracy, it's a good start by hiring some of the individuals who helped build one of the largest fulfillment networks to date. |
In this installment of the Industrial Advisors Podcast, Bill Condon and Matt McGregor offer an in-depth analysis of the industrial sector in the North End. They are joined by Derek Heed, a seasoned Colliers broker, who shares critical insights on the market's expansion, its longstanding ties to Boeing and the aerospace industry, and the recent surge of institutional investors and developments in up-and-coming areas such as Arlington and Marysville. Derek forecasts a stabilization in rental prices and a shift towards greater bargaining power for tenants, attributing this to a slight decrease in demand expected in 2024. This episode highlights the dynamic nature of the North End market and its ongoing transformation amidst various challenges, offering a comprehensive look into one of the Puget Sound area's significant industrial regions.
Commentary from Spencer Esau, SMARTCAP's Acquisitions Manager
The Industrial Advisors Podcast, hosted by Colliers International, recently featured an episode reviewing the Snohomish County industrial market. One big takeaway is an explanation for why Southend tenants are beginning to consider Northend relocations for the first time. Other highlights include a generally bullish industrial outlook for the submarket, as well as a couple of SMARTCAP callouts. This podcast is worth a listen.
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Newmark facilitated the sale of the leased fee interest in the land at Columbia Business Center, an industrial site in Vancouver, Washington, spanning around 113 acres for $96 million. This sale marks the largest transaction for industrial land in the Portland/Vancouver market. The team, led by Newmark Vice Chairman Nick Kucha and including executives and associate directors from both Newmark and Colliers, represented a private family seller. The Columbia Business Center, established in the 1940s and located strategically along the Columbia River near Interstate 5, is a prime industrial site offering extensive transportation options, including rail and barge access. This transaction highlights the scarcity of developable land in the region and the complexity of deals requiring trust and collaboration. Newmark, a global leader in commercial real estate, offers a wide range of services to various clients, generating revenues of about $2.7 billion by the end of 2022 and operating with approximately 7,400 professionals worldwide as of September 30, 2023. Commentary from Brian Burmester. SMARTCAP's Director of Acquisitions In a market where acquisitions have been few and far between, it's good to see a deal close in the Pacific Northwest. This transaction provides us with a good data point (~$20 per usable land sq. ft.) in addition to showing the continued appetite for capital to be in the Vancouver submarket. According the Clark County website, the site is zoned for Light Industrial use, suggesting future redevelopment. This aligns with what we have seen in the Vancouver submarket over the past several years, which has benefited from Portland's strict urban growth boundary restrictions. The greater Vancouver area has seen an 18% increase in industrial inventory since 2019. |
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Earlier this month, our Acquisitions and Investments team took a break from the usual office setting for an offsite meeting. It was a great chance to get a closer look at the market, understanding the ups and downs that could impact our business. The meeting turned into a brainstorming session where everyone openly discussed ideas, tested our assumptions, and brought in new angles that really boosted our strategies for acquisitions and development. It was refreshing and energizing, giving us a fresh take on our projects. Looking ahead, we're more excited than ever about what's next for our acquisitions and development plans. The offsite was more than just a meeting; it was a clear sign of our team's dedication to growing and innovating together. After heading back to the office, it was obvious we came back with more than just refined strategies; we had stronger connections among us. The value of stepping out of the office and coming together in a different environment is priceless. It's these kinds of experiences that fuel our journey toward doing great things. |