Amazon has leased the entirety of Industrial Realty Group’s 33815 Weyerhaeuser Way S. in Federal Way, Wash., in the southwest corner of King County. The property will provide the e-commerce giant about 225,800 square feet of industrial space.
Woodbridge Corporate Park is the redevelopment of the former headquarters campus of forestry products specialist Weyerhaeuser, which left the property for downtown Seattle in 2016. Los Angeles-based IRG bought the Federal Way property for about $70 million that same year, rolling out development plans soon after.
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The Amazon lease is in one of two industrial buildings that IRG recently completed at Woodbridge, which together total about 440,000 square feet. The second building is currently vacant, with Colliers handling leasing and marketing efforts.
The owner invested about $3.5 million to make various infrastructure improvements at the former Weyerhaeuser campus, including new sidewalks, lighting, roadway, landscaping, bike lanes and stormwater systems. IRG expects the two newly developed buildings will generate $6.8 million in tax revenue for the City of Federal Way.
IRG is also pursuing separate entitlement approvals for development of a new business park at the 425-acre former Weyerhaeuser site, but has not committed to a timetable, noting that it will depend on market conditions.
Seattle industrial still slowing down
The lease was larger than most Seattle-area industrial agreements so far in 2024, according to a first quarter Savills report. Frito-Lay’s 307,000-square-foot agreement at 51st Ave. N.E. in the Snohomish County submarket was the largest.
According to the latest CommercialEdge industrial report, Seattle’s vacancy rate clocked in at 6.8 percent as of April, 160 basis points higher than the U.S. figure. Compared to other Western markets, Seattle recorded the second-highest vacancy, as only metro Denver fared worse, at 7.1 percent.
Still, average in-place rates for industrial assets continued to rise at a decent clip—at $11.07 per square foot, up 8.8 percent over a 12-month period ending in April. Meanwhile, national rates stood at $7.96, up 7.4 percent over the same time frame, CommercialEdge data shows.