The Andover Co.
Specialty: Industrial and office property leasing and sales and management in the Kent Valley, with some properties close-in
Dave Baumer said the vacancy rate in the Kent Valley has never been lower, and soon prices there will start to edge up. Baumer, a principal with Tukwila’s The Andover Co., has been in the area’s industrial office leasing business since 1984.
“Historically, we would add 2 to 3 million square feet per year but that space is drying up,” Baumer said. “I foresee a time in the not-too-distant future when the Kent market will be more like the close-in market.”
He said many companies that lease office space in Kent, Tukwila and Auburn have employees who live in Seattle and Bellevue and they don’t like to have to move outside the county. Already, companies looking for more than 100,000 feet of space are having to move to Pierce County or even Thurston County, Baumer said.
“The companies that were close-in typically, if somewhat reluctantly, would move to the Kent Valley,” Baumer said. “But that’s not as much of an option for them anymore.”
A tight market?
Baumer said that as long as he’s covered the Kent Valley, there have been predictions that the tight market will cause a massive price-hike. But he said
the stars really do seem aligned for such a hike now. He said the vacancy rate is about 6 percent but feels much lower. “The average sales prices have risen to a point where the investors in the market demand these prices go up,” Baumer said. “(But) there’s always movement. Even in a tight market there are opportunities that come up.”
Baumer said another big trend he’s noticed in the Kent Valley is how institutionally owned the market is, with lots of big business parks rather than smaller, individual business owners.
“There’s a certain kind of a consistency in rates and there is kind of a desire to make sure the market is going up in the right direction,” Baumer said.
Baumer said developers are already planning for a need for more industrial office space farther south than the Kent Valley or Pierce County. He said there are some major speculative investments springing up in Thurston County on the I-5 corridor in places such as Centralia and he expects to see more industrial building there in the near future.
“That farther south market is critical for the big user,” Baumer said.
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