Seattle-Tacoma Industrial Market Report
2023 Investment Forecast
Developers Rush to Break Ground Amid Market’s Recent Tightening;
Infill Assets Continue to Garner Interest
Historic development leapfrogs demand. Seattle-Tacoma’s industrial sector rebalances this year, following a six-quarter frame where net absorption outpaced supply additions by a cumulative 4 million square feet. Developers — observing these lopsided conditions and the metro’s diminishing industrially-zoned land — are rapidly moving projects through the pipeline to capitalize. Although consistent population growth is sustaining upward momentum for space absorption, the 8 million square feet of new supply slated for 2023 delivery will put a halt to ongoing vacancy compression; instead, pushing the rate up to a level equivalent to the 10-year average. In spite of this setback, higher availability may actually serve to support lease renewals by more cost-sensitive firms, as lengthy stabilization periods for some new builds taper the pace of rent growth. Concurrently, asking rates are expected to advance at a faster pace in other West Coast hubs, potentially influencing some users to mull a relocation to Seattle.