EQT Exeter Pays $82M for Last-Mile Industrial Asset

EQT Exeter Real Estate Income Trust acquired a 202,464-square-foot, last-mile industrial property in the metro Seattle market from Dermody Properties for $81.5 million. Amazon fully occupies the property, according to CommercialEdge data.

The purchase of 2871 S. 102nd St. in Tukwila, Wash., represents the REIT’s fourth property acquisition since the fund was created, bringing its total capital deployed to approximately $390 million since inception.

Completed in 2021, the building features rare Class A specifications for its infill South Seattle location. The property provides proximate access to Seattle’s growing population. Nearly 4 million people are within a one-hour drive, and more than 200,000 industrial workers are within a 45-minute drive.

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Its location connects customers and suppliers via closely located interstate freeways, the Port of Seattle and Seattle International Airport. Interstate 5 borders the South Seattle submarket and runs from Vancouver, B.C., to Mexico, providing access to major West Coast population centers.

Last week, EQT Exeter acquired Gateway Commerce Center, a 434,171-square-foot, Class A industrial property in Streetsboro, Ohio, from a joint venture between Westminster Capital and GEIS. According to CommercialEdge data, the asset traded for $40.2 million. JLL represented the seller.

Attraction of Seattle’s industrial market

Chris Spofford, executive managing director, heading up the industrial team for JLL in Seattle, told Commercial Property Executive that while total industrial vacancy for the Puget Sound region exceeded 8 percent for the first time since 2010, JLL is reporting a notable uptick in touring activity particularly between the ports, giving the market reasons for cautious optimism.

“The most recent activity has been in the 25,000 to 50,000 square foot range on average, as owners of second-generation properties have grown more open to subdividing larger blocks,” Spofford said. “The market is expected to remain tenant-favorable with a continued flight to quality, evidenced mostly within core markets in Kent Valley and Pierce County.”

Of the submarkets within the Kent Valley, Spofford said Tukwila has maintained one of the lower overall availability rates within existing product at 6.1 percent in the third quarter, and has been minimally impacted by the region’s recent swell in sublease space.

Nick Menghini, research manager at JLL, told CPE Tukwila is a relatively small industrial market of 7.2 million square feet and has surprising resilience.

“While the Puget Sound region has a vacancy rate of 8.2 percent and the Kent Valley’s vacancy stands at 9.2 percent, Tukwila vacancy sits at just 6.2 percent with just one small project under construction and no new deliveries since this project that traded was delivered,” Menghini said. “Tukwila has enjoyed solid rent growth in the past few years and still offers compelling economics for the companies looking for modern, Class A industrial facilities.”