While there is no denying the effects of the national recession are affecting cities and businesses throughout the Puget Sound Area, Kent Valley’s high number of manufacturing and warehouse properties is helping the city get through it.
“It allows us to weather the recession better than we might otherwise,” said Economic Development Director Ben Wolters. “It’s very strong and has been for quite some time.”
The city of Kent contains more than 42 million square feet of warehouse space and its location halfway between the ports of Seattle and Tacoma, as well as easy access to highway corridors and proximity to the airport, make the Kent Valley very desirable to businesses, Wolters noted.
“It creates a variety of spaces that can support a variety of business opportunities,” Wolters said. “Combined with Kent’s strategic location … that really has driven a lot of businesses to want to be in Kent.”
According to Kraig Heeter of GVA Kidder Mathews, a commercial real estate agency that handles many of the Valley’s warehouse and industrial properties, the vacancy rate throughout the Kent Valley is a “near historic low” of 4.3 percent.
“Our market is still very healthy,” Heeter said. “When you look at the commercial market, the Kent Valley dominates.”
Heeter said the city’s retail component is minimal compared to the industrial sector, which he characterized as “half of (all available property) from Tukwila to Sumner.”
But even Kent’s strong position won’t be enough to insulate it totally from the recession, according to Heeter.
In the past months “negative media attention on the economy” has “created a lot of fear” throughout the business community that has led many businesses to put on hold plans to expand or move, Heeter said.
That means it may get a little worse before it gets better, with vacancy rates potentially doubling before settling back down.
“We’re not at the bottom, but we don’t think the bottom is that bad,” he said. “That doesn’t mean it’s going to be disastrous.”
But for now, the low vacancy rates and a shaky market are creating opportunities.
“It’s becoming more of what we call a tenant’s market,” Heeter said. “The demand is still strong and there’s very little supply.”
Heeter said landlords are also more willing to drop rents or maintain them at current levels to ensure tenants stay in place, unlike in previous years when the market was booming.
“A year ago, they were getting asking rates,” Heeter said.
Wolters said there continues to interest in the city’s industrial sector has remained strong and last month he spoke with a bio-diesel company looking to move to the area because of Kent’s central location.
Wolters added that over the past two years, the city has seen a “steady stream” of Seattle businesses relocate to or show interest in Kent because of increasing property values in Seattle or from being pushed out of their current location by redevelopment.
Wolters said the city’s industrial sector also allows it to maintain a high bond rating and was mentioned specifically in the report’s narrative section as part of the “diversity and strength of the industrial base.”
“The warehouse, commercial and industrial job and business base we’ve created here in the valley is vitally important for the rest of the region, but it’s also key in terms of the future of the Kent community,” Wolters said.
Heeter agrees and sees much potential in the market for those looking to expand.
“There’s going to be money to be made,” he said. “The Kent commercial market has so many positive attributes that it’s going to pull through this economy,” he said.
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