Insights

News and info from Saratoga Commercial Real Estate

Saratoga’s Recent Insight

Ken Reinschmidt recently wrote a summary of the Whatcom County industrial space market for one of his clients, you might find it interesting: 

  1. Our small market saw great vacancy and depressed rent during the recession, 2008 through 2016.
  2. Since our market is small, great vacancy % still only relates to a limited sf of vacant space.
  3. Market has seen steady trend of absorption during past 2-3 years, fueled by improving economy, improved business lending, and exacerbated by legalization of marijuana growing.  Marijuana grow operations absorbed a lot of vacancy in 2016 and 2017.
  4. Vacancy rate dipped below 5% in 2017 and rent rates became firm and started escalating from $0.50/sf/mo+ NNN to our current market rate of $0.65/sf/mo + NNN.  Rents continue to escalate and for the first time since 2007, we see developers building new warehouse property in 2017.  It looks like developers need about $0.65-$0.70/sf/mo to support new construction.  Our office has signed over 40,000 sf of warehouse leasing at $0.65/sf/mo + NNN in the past quarter.  This has been a big deal because it has been very difficult to achieve $0.65/sf rent in recent years (you can probably tell that I do a lot of work for Landlords, but I also do plenty of tenant representation).
  5. There is very little inventory for industrial warehouse in Whatcom County.  We are currently seeing very active interest in the 6,000 sf to 10,000 sf warehouse market.