FEDERAL WAY BUSINESS PARK

PROJECT SUMMARY
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DATE ACQUIRED

August 2019

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LOCATION

Federal Way, WA

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SIZE

133,356 SF

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TENANTS

40

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YEAR BUILT

1979

SUMMARY

Federal Way Business Park is a 2-property portfolio totaling 133,356 SF, currently 68% leased to 35 tenants. The properties are located in the Federal Way/Auburn submarket, alongside the I-5 Freeway between Seattle and Tacoma.

Campus Business Center is a multi-tenant industrial property developed in 1978 by Koll. The property consists of 4 buildings, totaling 67,071 sf. The buildings are concrete-tilt construction, offering both grade-level and dock high loading options. The project is current 74% leased to 22 tenants. Alongside the cosmetic rebranding, the property is being renamed Federal Way Business Park North.

9th Avenue Center is a multi-tenant office/industrial property developed in 1979 by Koll. The property consists of 4 buildings, totaling 66,285 sf. The project includes 2 wood frame office buildings totaling 28,455 sf and 2 concrete tilt industrial buildings totaling 37,830 sf. The office buildings are currently 30% leased to 5 tenants, with most of the vacancy being functionally obsolete after the Federal Way Police Department moved out of the majority of Building B, leaving behind overbuilt office and temporary holding cells which have not since been reconfigured. The industrial buildings are currently 84% leased to 8 tenants, offering both grade level and dock high loading options and low-finish configurations. Alongside the cosmetic rebranding, the property is being renamed Federal Way Business Park South.

SITE PLAN
FEDERAL WAY BUSINESS PARK NORTH
FEDERAL WAY BUSINESS PARK SOUTH
MARKET
FEDERAL WAY-AURBURN INDUSTRIAL MARKET

Geographically adjacent to each other and conveniently located between I-5, the Valley Freeway, and the West Valley Highway, the Federal Way-Auburn submarket is the second largest industrial market within Kent Valley as measured by rentable area. In addition to providing easy access Puyallup and other major industrial hubs in the metro, it provides access to the all-important Port of Tacoma. Federal Way-Auburn has a variety of industrial firms that range from aerospace manufacturing companies to distribution-oriented operators. Yet, by far, Boeing is the largest tenant in the submarket, with nearly 800,000 SF of space at its sheet-metal assembly plant near the Valley Freeway/West Valley Highway junction. 

The aerospace giant employs roughly 6,000 people in the submarket. Large retail companies also have distribution centers here – for example, Seattle-based Tommy Bahama’s 270,000-SF distribution facility just north of Auburn Municipal Airport and Starbucks’ 350,000-SF distribution center near The Outlet Collection mall. Because of the efflorescence of the industrial sector, developers continue to inundate south Seattle in general and Federal Way- Auburn in particular with high-end industrial product. Even so, vacancy in the submarket is very low. In fact, historically, Federal Way-Auburn’s vacancy has tended to be lower than the Kent Valley submarket as a whole. In terms of rental growth, Auburn’s cumulative rent growth this cycle is among the highest. For instance, due in part to being nearly fully occupied, flex-industrial properties are exhibiting robust rent growth. Expecting market rents to grow between 3-4% for next 24 months is a well-warranted. 

LOCAL AREA - FEDERAL WAY

By being geographically next to Auburn and a quick drive away from Tacoma, Federal Way serves a distinct role in the industrial ecosystem of south Seattle – not least of which by being a conduit to the Port of Tacoma and being the residential abode for workers who labor in various nearby environs such as Tukwila, Renton, SeaTac, Tacoma, Seattle, and Auburn. As the tenth most populated city in the state of Washington, it is a community of 96,690 residents featuring a labor force of 25,918 with a median annual income of $58,855. Top industries within the metro include Health Care, Retail Trade, Professional Scientific, and Technical Services. During the past five years employment in Federal Way has grown by a cumulative 8,345 persons at a growth rate of 3.69% over the half decade. With unemployment currently at a healthy 4.5%, expect Federal Way’s growth and population to only increase for the foreseeable future. It is now the prime destination of choice for gentrified members of the broader Seattle community who find the metro’s comparatively affordable homes, burgeoning economy, and proximity to nearby locales amenable to their interests and a desirable alternative to the high prices of northern and eastern King County. 

PROJECT PHOTOS