Intracorp Enjoying The Sudden Interest In Snohomish County

BY JON SAVELLE
Journal staff reporter

Like water, real estate development tends to follow the path of least resistance. Where land is available with the right zoning, at the right price, and in the right market, buildings are likely to go.

Such is the case with South Everett, which is drawing tenants to new industrial parks that offer lots of space and attractive rents -- things that are becoming scarce elsewhere.

One example is Intracorp's industrial center at Seaway. Just northeast of Boeing's sprawling 747 plant, the 1-million-square-foot development is providing a kind of relief valve for companies that need either a new location or more space.

They come from Seattle, Bothell, Everett, Redmond, Kirkland, Woodinville and Lynnwood. Of the 13 announced tenants or buyers of property in the complex, eight are manufacturers, three are distributors and one is an office user. Their new spaces range in size from 26,400 square feet for Washington Natural Gas Company offices to 150,000 square feet for Softworld Services, a manufacturer and distributor. And one, Snohomish County's Community Transit, is using 23 acres for a bus base.

John Solberg, Intracorp vice president, said the sudden popularity of the area is due to a number of factors. One is that, thanks partly to a new freeway ramp paid for by Boeing, the area has excellent transportation infrastructure. That translates into drive times -- traffic permitting -- of 18 minutes to Bothell, 28 minutes to Bellevue and 30 minutes to Seattle.

This is important for moving both goods and people. But for manufacturers in particular, locating the business within commuting reach of their employees is critical. Solberg said manufacturers can't afford to lose their employees' expertise and experience, and so must be sure that any new location is not going to force valuable people to go elsewhere.

Gary Bullington, an associate director of Cushman & Wakefield of Washington who has worked with Intracorp on the Seaway project, said the opposite is happening.

"The labor force we're trying to cater to is moving closer and closer to south Everett," he said.

Skilled manufacturing workers and executives increasingly have been moving to that area, and new upscale subdivisions have sprouted to accommodate them.

This trend parallels the movement of businesses, as evidenced by Industrial leasing figures. The Northend, which for years has been the poor relation to the booming Eastside, now has a steeper growth curve than the Eastside although the square footage is still much lower than in that mature market.

Rental rates also tell a story. Bullington said there are big differences between the Eastside and South Everett, with land values accounting for much of the disparity.

For example:

• In Redmond, rates for shell warehouse space, for example, run between 45 cents and 50 cents per square foot. In addition, triple-net charges for property taxes, fire insurance and common-area costs range from 25 cents to 28 cents.

• Bothell rents for business park space are hovering at 50 cents to 55 cents, with triple-net charges of 30 cents. In Woodinville it's 42 cents to 45 cents rent plus 12 cents to 13 cents triple net.

But at Seaway, rents average 38 cents per square foot, with triple-net charges of 10.5 cents.

This cheaper space is also new space, in an environment comparable to high-technology parks. All of it is build-to-suit. Bullington said the development has been very attractive to successful startup firms that now need larger, second-generation facilities.

One longtime Seattle firm, Port Chatham Smoked Seafoods, is making the move to Seaway in March. Curt Fischer, controller for the company, said Port Chatham will consolidate three of its four operations at Seaway, leaving only a smokehouse in Ballard. Seaway will be home to processing (now in Bellingham), and a warehouse and corporate offices that now reside on Pier 89 in Seattle.

In explaining the move, Fischer mentioned a number of advantages.

"Rental rates were reasonable, as far as rental rates go," he said. "Public transit goes through there. And a large number of people who work here live north anyway. It's a real good opportunity for us."