PugetTenant demand for high-quality, functional space combined with limited supply has driven Puget Sound industrial rents to record levels, according to a new Colliers report. Asking rents in the first quarter of 2023 have increased 26.7% year-over-year from $0.85 to $1.08 per square foot triple net, indicating a strong market trend across the region’s submarkets and sectors.
Net absorption for the quarter was -366,000 square feet despite several large tenants moving into space; however, Colliers considers this an anomaly and forecasts an above-average year for net absorption in 2023 that won’t reach 2021 or 2022’s records but will still be notable nonetheless. Vacancy also increased slightly in Q1 to 3.7%, attributed mainly due two buildings delivering without any leasing activity taking place yet.
Kent Valley saw the highest asking rent increase at 31.8%, followed by Pierce County at 19..5% and Northend at 18..8%. According to Colliers’ predictions most industrial leasing activity this coming year will take place on new supply as well as 2nd generation spaces located within Pierce & Snohomish Counties respectively.
