By Shawna de la Rosa, Puget Sound Business Journal
Dallas-based Dalfen Industrial added a second property to its Puget Sound portfolio, bringing its regional square footage to nearly 850,000 square feet. The deal took place in Mayand was announced Wednesday.
The company acquired the 137,000-square-foot Tukwila Logistics Center in an off-market deal for $34.8 million. The building, at 18375 Olympic Ave. S. in Tukwila, is fully leased to the blind and shade manufacturer Rainier Industries.
The price works out to $254 per square foot, which is slightly higher than the region’s second quarter 2022 average of $232 per square foot.
Last summer, Dalfen acquired the 711,855-square-foot, three-building Tacoma Supply Chain Center, aka “Big Freddy,” near 176th Street East and 50th Avenue East in Frederickson for $115 million.
The Tukwila Logistics Center is in the hot Kent Valley industrial submarket. Early this summer San Francisco-based Lift Partners paid $106 million for Holman Logistics distribution center in Kent. Nearby, the 823,000-square-foot Pacific Gateway industrial park was nearly fully leased shortly after its completion this spring.
“Olympic Logistics Center’s highly infill location will always be in demand,” Rich Weiss, market officer of Dalfen’s West region, said in a release. “Proximity to both Seattle and Tacoma makes it a key last-mile property in a rapidly growing market.”
Dalfen will continue to expand in the Seattle area, said Weiss, citing the Puget Sound region’s population growth, which is 56% higher than the average growth in the nation’s 100 top markets.
A total of 106 industrial properties changed hands in the second quarter of 2022, but rising interest rates and construction costs are having a cooling effect. In the Puget Sound, the industrial market vacancy rate inched up in the second quarter of 2022 to 4.2% from 3.9% in the first quarter. Another 8.4 million square feet is still under construction.
The industrial market second quarter sales second volume was $440 million, which is a 43% from the previous quarter.