New York-based GTIS Partners has formed a joint venture with Ryan Companies US to develop a 100,000 s/f last mile distribution center in Seattle.
65 S Horton Street will be a four-story, class-A property located in one of Seattle Qualified Opportunity Zones. The building, once completed, will span 126,646 s/f and is expected to cost around $42.5 million.
The site is located one mile south of downtown Seattle and adjacent to several Port of Seattle terminals in SoDo.
Despite the district’s strong strategic location, much of the existing stock of industrial space is dated and functionally obsolete. There is also very little institutional ownership in the area, creating opportunity for new product managed by an institutional quality operator.
Rents have grown approximately nine percent per year since 2013 across Seattle’s “close-in” submarket, which includes SoDo, as a result of the MSA’s strong population and economic growth combined with a lack of new industrial supply.
Amit Rind, Managing Director at GTIS, said, “We are excited to partner with Ryan Companies to deliver what we view as a truly innovative multi-story product. We have received great feedback from potential users regarding the design and expect demand to be strong given the high barriers to entry and scarcity of class-A urban infill assets in Seattle’s close-in submarket.”
Marc Gearhart, Vice President – Development with Ryan Companies said, “We are excited to partner on 65 S Horton with GTIS and foresee much success for this project thanks to strong support from our financial partner and a market for a building design unlike any other. 65 S Horton models a new approach to parking, truck loading, shipping receiving, and material handling. We’re confident the program will provide a much-needed solution for proximity driven industrial and R&D users who desire to be close to the Seattle Central Business District.
The design provides dual freight elevator access to floors two through four. The ground floor will feature a loading dock, shipping/receiving space, 10 covered docks and 85 parking spots.
Various e-commerce operators and third-party logistics providers, two major sources of demand for urban industrial assets, have expressed interest in the multistory product to help meet the need for more last-mile space and as a way to support their growth.
As e-commerce adoption continues and consumer expectations for delivery speed grow, demand for well-located urban industrial space has risen sharply and will likely continue to rise. Land constraints in densely populated urban areas, however, have limited new development and created a shortage of new, high quality supply. The innovative multi-story design helps to address this shortage by maximizing the amount of usable square feet of industrial space per square foot of land. By building vertically, the Project will have a much larger gross leasable area than could be achieved with a single-story product at the same location.
The Project is one of seven investments made to date by the GTIS Qualified Opportunity Zone Fund. In total, GTIS has invested in 14 deals located in Qualified Opportunity Zones including the recently sold RÊVE Boulder, which represents GTIS’ first completed project located in an Opportunity Zone. 65 S Horton St. also marks GTIS’ first investment in the Seattle MSA and the company’s first investment in a multi-story urban last-mile logistics facility.