Ken Reinschmidt recently wrote a summary of the Whatcom County industrial space market for one of his clients, you might find it interesting:
- Our small market saw great vacancy and depressed rent during the recession, 2008 through 2016.
- Since our market is small, great vacancy % still only relates to a limited sf of vacant space.
- 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.
- 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).
- 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.