Industrial Real Estate in Seattle, WA

Cap rates for industrial properties in Seattle vary by submarket, property class, and occupancy levels. The overall Seattle market average cap rate is approximately 5.2%. Class A properties typically trade at lower cap rates than value-add opportunities.

Industrial has benefited from structural demand drivers including e-commerce growth (which requires 3x more logistics space than brick-and-mortar retail), supply chain reshoring and nearshoring trends, inventory stockpiling following pandemic-era disruptions, and limited developable land in infill locations. These factors have driven vacancy rates below 4% nationally and pushed rent growth well above historical averages in most markets.

Bulk warehouses are large-scale distribution centers (typically 200,000+ SF) located along major transportation corridors, used for regional storage and distribution. Last-mile facilities are smaller (20,000-150,000 SF), located closer to dense population centers, and serve the final leg of delivery to end consumers. Last-mile properties typically command higher rents per square foot due to land scarcity and proximity to customers but offer lower overall NOI given their smaller footprint.

Amazon and Microsoft together employ over 100,000 people in the metro, creating significant concentration risk. However, the ecosystem has diversified substantially, with Google, Meta, Salesforce, T-Mobile, and hundreds of startups providing a broader employment base. Boeing's commercial aviation division remains a major employer despite corporate headquarters moving to Virginia. The metro's deep talent pool, university system (UW), and quality of life create a self-sustaining innovation economy that extends beyond any two companies.

Bellevue has attracted major tech tenants seeking modern, high-rise office space with excellent suburban access, lower business taxes than Seattle (no city B&O tax equivalent), and proximity to the Eastside's highly educated residential communities. The opening of Link light rail's East Link extension connecting Bellevue to Seattle has further enhanced accessibility. Bellevue's skyline has been dramatically transformed by new Class A towers, and asking rents in the CBD now rival or exceed downtown Seattle.