The Puget Sound industrial market remained solid at the end of 2019, with direct average asking lease rates at $0.77 per sq. ft. NNN, a 5.4% year-over-year increase. Total vacancy increased slightly from Q3 2019 to 5.5%, an impressive showing considering that over 1.4 million sq. ft. was delivered in the fourth quarter.
After three perplexing quarters, the Kent Valley industrial market soared during Q4. There were nine new 100,000+ sq. ft. move-ins, a definite signal of the area’s desirability. Net absorption for the quarter totaled 438,977 sq. ft. The direct average asking lease rate rose 6.7% year-over-year to $0.67 per sq. ft. Total vacancy hovered around 5.7%.
Regional investment sales for the quarter totaled $454.1 million, bringing the 2019 total to $1.46 billion, a slight decrease from 2018. The lack of a noticeable surge prior to the new Washington State excise tax policy—which goes into effect in 2020—suggests that industrial investors will continue to respond to market fundamentals rather than policy decisions.