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Washington State secured a spot in the top 10 of the U-Haul 2023 Growth Index, highlighting its appeal as a destination for movers utilizing one-way U-Haul equipment. This ranking underscores Washington's growing attractiveness, alongside other leading states like Texas and Florida, which respectively held the first and second positions for the third consecutive year. Commentary from Spencer Esau, SMARTCAP's Acquisitions Manager Washington is back in the top 10 of the U-Haul Growth Index after a 3-year hiatus. Population growth is notoriously difficult to measure but U-Haul’s internal data is widely regarded as a solid proxy for gauging how well states and cities are attracting residents. With California ranking dead last for four years running, it is clear that Washington is benefiting from California’s outmigration. |
BKM Capital Partners has acquired the 217 Distribution Center, a multi-tenant industrial park in Metro Portland. This 451,062 sq ft property offers 13 units and boasts excellent features like dual-dock-high loading capabilities, 24-foot-clear heights, and 14 railway dock doors.
BKM plans to invest $4 million in upgrades, including roofs, parking lots, and more, while increasing the number of units to 15. The property's location along Highway 217 provides easy access to the Pacific Northwest, making it ideal for logistics-focused tenants. Currently, it's fully leased to credit tenants like Nike, Rexel, and the Beaverton Police Department.
This acquisition is part of BKM's successful year, during which they acquired 14 properties totaling 2.2 million sq ft in various states. Their strategic vision positions them as industry leaders, with plans to deploy $200 million in Q1 2024.
Commentary from Dominic Vinti, SMARTCAP's Senior Acquisitions Analyst
BKM Capital Partners finished up an acquisition in the Portland submarket of Beaverton. The 5 building, light industrial park consists of 13 units and is anchored by high credit tenants such as Nike, Rexel, Blue Ocean Logistics, and others. The park was acquired for $67 million, or $148 per square foot. Per a press release from BKM, they plan to pour about $4 million in capital expenditures into the park along with adding 2 additional unit spaces.
With BKM's disposition of the Beaverton Industrial Center in Q3 '23, among other recent light industrial trades in the greater Seattle area, light industrial parks have been the bulk of recent value add transaction volume in the Pacific NW. Light industrial parks have provided strong fundamental outlooks as supply is shrinking, recently giving way to big box industrial centers, leaving fewer and fewer options for tenants that call these parts home. Most light industrial parks can be acquired at less than replacement cost and have below-market rents, providing valuable upside when current leases expire.
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Exciting news for Everett's Paine Field Airport! The Washington Air National Guard is transferring 14.3 acres of land to Snohomish County, a major boost for the region's aviation industry. This move, part of the National Defense Authorization Act, is set to create jobs, boost the economy, and improve infrastructure at Paine Field. Commentary from Spencer Esau, SMARTCAP's Acquisitions Manager Snohomish County Executive Dave Somers said, “Paine Field Airport is the crown jewel of our region’s economy, generating over $60 billion yearly in economic impact and accounting for over 125,000 jobs”. Unlocking 14 acres of unused real estate is a coupe for Paine Field, which has been attempting to gain control of these properties for over thirty years. Included in the transfer is a parcel which will allow Paine Field to expand the passenger terminal’s access road from two lanes to three. This will help the airport achieve its goal of expanding from two passenger gates to twenty in the next ten years. The county envisions an aerospace manufacturing facility at another transferred parcel which is near Boeing’s assembly plant. |
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In 2024, Bellevue's Central Business District (CBD) shines as a bright spot in the real estate market, despite challenges elsewhere. After a slow start in 2023, the area has seen a resurgence in tenant demand, with about 1 million square feet of pending leases, indicating a potential "soft landing." This stands in contrast to the broader Eastside region, which continues to struggle, according to a Q4 2023 report by Broderick Group. Commentary from Dominic Vinti, SMARTCAP's Sr. Acquisitions Analyst Despite the doom and gloom in most downtown office markets throughout the United States, the Bellevue CBD has remained fairly resilient. With a strong leasing finish to 2023, Bellevue's CBD could find itself in a soft-landing scenario. Bellevue and the remainder of the Eastside scored several renewals and new leases at the end of 2023, all 10k SF or greater. Bellevue's strength has been high quality assets that comprise the CBD. Class A & A+ spaces with desirable amenities have found themselves insulated from much of the office turmoil as tenants have moved to higher quality space to draw their employees back into the office. Even though the Eastside lost some major tenants, optimism remains strong for 2024. With rumored 1 million feet in pending leases, the Eastside Market could see its vacancy drop from 17.5% to 15%. The pandemic ushered in an era of unique working conditions that are still being felt as we navigated 2023. Economic strains and market uncertainties have led to tightened budgets and occasional workforce reductions. In 2023 we began to see employers advocate for return to office spearheaded by Amazon in May of '23 and followed by many other large employers such as Meta and Boeing. As the push for return to work continues in 2024, occupancy patterns will tick up and spur near term positive leasing velocity of quality space with minimal CAPEX requirements. With new leasing comes foot traffic and with foot traffic comes the bounce back in vitality of the urban core, as our CBD's begin to rebound, the snowball effect will hopefully begin taking shape in 2024. |