With Southwest Washington’s economy in full gear, the growth of industrial companies has made for busy times for commercial real estate agents tasked with helping those companies expand.
Only, many agents are saying they aren’t finding a lot of available space to show their clients.
“A lot of these guys have been managing to work within the confines of the spaces they are in, keeping things efficient, not getting in over their skis — but now they are bursting at the seams,” said Garrett Harper, an executive with the Vancouver real estate firm Eric Fuller & Associates. “I’ve got a fair number of clients wanting to get into a bigger space.”
Light industrial space — often used by companies whose wares demand elbow room, sturdy floors and high ceilings — is currently at a scant 4.9 percent vacancy in Clark County, according to the commercial real estate firm CBRE Group in Portland.
Manufacturing and wholesale trade experienced relative booms in 2016. Wholesale trade added 900 jobs last year, according to the latest data from the Washington Employment Security Department. Manufacturers kicked in 400 new jobs of their own.
“That’s more job opportunities and it’s something we need to pay attention to in terms of a training pipeline,” said regional economist Scott Bailey.
The economic turnaround has added pressure to find lots zoned for industrial use. Some large land developments that could add to that inventory are set to come online in the coming years.
Business confidence
According to Mike Bomar, president of the Columbia River Economic Development Council, 10 out of the 21 companies the CREDC has visited since the start of the year have started looking to expand. Those firms range from pharmaceutical manufacturers to technology companies.
Harper, the real estate agent, said he and others are hearing from companies large and small that they are interested in more space.
“It’s definitely a sign of the times and how strong the market is, and how active industrial tenants and developers are,” said Jake Bigby, a Camas resident and real estate agent for CBRE.
Several companies outside of the Portland area are also looking to move into the area, Bomar said. These firms also would look for office space that could be built in these light industrial spaces.
“The product we have coming online is really interesting and compelling,” he said.
But the companies already here seem to be the ones most enticed to find new spaces. “It’s a good, all-around mix of things going on. I think most active is the expansion piece: our existing companies are doing well,” he said.
Rising on Lower River Road
One area poised to meet the demand is on Lower River Road in the Fruit Valley neighborhood. More than 1 million square feet of light industrial space there is set to open in the coming years.
Two swaths of land comprise that development: the Centennial Industrial Park and Portside Industrial Park.
Centennial Industrial Park is being developed by the Port of Vancouver, where occupancy rates of its other facilities have brimmed at 99 percent occupancy since 2014, according to port spokeswoman Abbi Russell.
“We have very little space left and we try to do what we can to accommodate requests (for space to grow), but unfortunately we can’t accommodate as much as we’d like,” she said, adding that companies at the port account for 3,200 jobs.
As available space dwindled to nearly nothing, the port broke ground on a new, 125,000-square-foot industrial space called the Centennial Industrial Building. The new building takes up 7 acres of the 58-acre industrial park. Up to five tenants can use the space, depending on the size of the companies.
The new building was recently joined by Sunlight Supply, which bought 15 acres to build a 306,000-square-foot headquarters. Russell said the two developments leaves about 17 acres of shovel-ready land that could be developed soon.
Another 800,000 square feet of space is set to go online across the street at the Portside Industrial Park. The facilities are being built in three phases on a 43.5-acre property.
While the spaces hope to attract manufacturing, warehousing and distribution businesses, they could also accommodate offices. Rents for light industrial spaces are $0.48 per square foot, plus a $0.85 per square foot surcharge for offices.
Project Orange
Another new industrial campus is just entering the permitting phase.
Called Project Orange, the campus could eventually add 525,000 square feet of space, 2,000 parking spaces and potentially eight structures — enough room for a fistful of companies.
The details were revealed in a mid-February preapplication filed with the city of Vancouver. Vancouver developer Killian Pacific would build the campus on a 35-acre property owned by Quad Investments near state Highway 14, just north of Columbia House Boulevard.
The first phase proposes a three-story industrial office on the east side. The second phase could include three more buildings, followed by three or four more buildings in phase three. The fourth and final phase proposes two larger two-story buildings to the west.
While the campus is zoned for light industrial, the space could be used for offices. Lance Killian, president of Killian Pacific, declined to say whether any tenants have been lined up.
“Without speaking to any specific projects or anything like that, it’s definitely consistent with the type of companies that we’re trying to attract and the type of product we are looking for,” said Bomar, of the CREDC.
Looking ahead
While the developments mean more growth for Clark County, Bomar said there is still a lot left to do. Much of that work revolves around the numerous other factors that build communities: workforce training, education, housing, transportation, infrastructure.
“There’s certainly been an overall tide shift that has been helpful,” Bomar said.
But when comparing Clark County to other similar counties, such as those on the outskirts of Austin, Texas, or Boise, Idaho, Clark’s growth may actually be somewhat slower, he said.
“We’re actually lacking in some of the indicators, in terms of growth,” Bomar said. “Everything is moving in the upward direction, but other (places) are accelerating faster. Within the metro area, we are looking at: What are the barriers? Why is Clark County not seeing as fast as growth? What are the differences?”
