You can get darn near anywhere in the county in half an hour or less. There are no corporate or personal state income taxes. Heck, you can even pump your own gas. All perfectly good reasons why folks might live in Clark County.
No longer in the shadow of “big brother” Portland, Clark County is the “little brother” who has grown up. Affordable living, great schools and a picturesque landscape are just a few reasons people choose to live here. One of the most important, though, is available industrial land.
There is nothing more that the citizens of Clark County would like than to work north of the river as well. The Portland Metro Area, as of three years ago, had a deficit of 300 industrial acres. That deficit continues to grow as places we thought were “outskirts” now have become viable candidates for speculative development or industrial build-to-suits. A speculative product is built without a particular tenant or owner in mind … space not spoken for. However, a build-to-suit has a particular owner/user in mind, and improvements are tailored to those needs.
For the past few years, local, regional and national developers have asked the question, “Clark County is great, but there has been no absorption to speak of. Why go north?” This is a fair statement. With industrial vacancy hovering around 4 percent, a good 1.5-2 percent structural vacancy (schlocky older generation product), there hasn’t been much to look at. Not many folks are willing to take the chance and build speculatively. Nothing built, nothing absorbed. The tide has turned.
Dermody Properties kickstarted the current wave of industrial warehouse deliveries about four years ago. They built a speculative building, close to 100,000 square feet, near State Route 500/503. At the end of 2013, net absorption in the county was shy of 60,000 square feet. That same year, deliveries were a whopping 27,000 square feet.
Dermody Properties took a chance. Before the paint had dried a building that was slated to become part of Dermody’s portfolio was sold to a local owner/user. They had not even thought of a sale. The typical progression looks to build, lease up, hold for investment or sell for a respectable return. At that moment the case could be made to build more speculative warehouse space. 100,000 square feet built, 100,000 square feet delivered, 100,000 square feet absorbed.
Fast forward a couple of years. Specht Development, in a partnership with Guggenheim, acquired close to 19 acres near the Port of Vancouver. They set out to build 352,000 square feet. Completed last year, they were able to pre-lease the majority of space and finished the year with the entire project leased. The next phase is now in the works. What once was thought of as “big brother” industrial numbers has now become a reality for the smaller sibling.
Larger industrial developments dot the landscape on the Portland side of the river. There was about 2.7 million square feet of net absorption in the warehouse sector of Portland Metro last year. Almost 600,000 square feet of that was in Clark County. In 2013, 60,000 square feet was absorbed and 27,000 delivered for the year. During the same time four years later, fourth quarter deliveries in 2017 north of the river were at 863,470 square feet, which is close to half the metro industrial product delivered.
The business mindset in Southwest Washington fosters a creative and cooperative attitude. My experience with local and regional entities (CREDC, GPI, ICC … the list goes on and on) when working through a project lend me to believe customer service is second to none. Open and honest business relationships and personal friendships come to mind. This is a welcome sight considering some of the larger industrial parcels in the region are poised to be developed right here in Clark County.
Certainly makes my job a bit easier when I have to educate my clients on the virtues of their ability to make business decisions regarding real estate. Needless to say, Southwest Washington is not just a cool place to live, it has become a place to explore, expand, do business and work!
Steve Hunker is a native of the Northwest who works for Capacity Commercial Group with offices in both Washington & Oregon. Steve specializes in advising, and guiding his clients through complex sale and lease negotiations, dealing with commercial and industrial properties. Contact him at firstname.lastname@example.org or see his website www.industrialgurusnw.com.