A Promising Outlook on the Tri-Cities Commercial Real Estate Market: A Q+A with Brenda Garibay, Commercial Real Estate Advisor

DECEMBER 15, 2022 – PASCO, WA

Elite Construction + Development had the pleasure of sitting down with Brenda Garibay, Commercial Real Estate Advisor with SVN Retter & Company, in an exclusive interview regarding the commercial real estate market in the Tri-Cities, WA. From increasing interest rates that continue to be below the historical average, to a significant need for commercial properties along with continued enthusiasm shown by investors, Brenda explains why the local commercial real estate market remains prime to purchase, sell, and lease.

Q: Describe your role and how you got into it.

A: As a Commercial Real Estate Advisor, I help my clients sell, purchase, and lease commercial properties. I attended the University of Washington’s Michael G. Foster School of Business, where I earned my degree in Business Administration and Marketing. Before graduating, I joined Wells Fargo Commercial Banking as a Business Relationship Manager. I later transferred to Wells Fargo Home Mortgage as a Home Mortgage Consultant. In these roles, I helped clients grow their business or buy their dream home, both of which were rewarding. I then took a couple of years to focus more on my two children and manage our family commercial properties. It was during this time that I became even more intrigued with real estate. With a background in lending, property management, and real estate development, I decided to obtain my real estate license. The journey has been exciting! What I enjoy most is helping clients achieve their financial goals and contributing to the exciting growth of our community.

Q: What are the biggest trends in the Tri-Cities, WA commercial real estate market?

A: We have seen record-breaking sales in real estate in the last couple of years. Industrial, high-density, retail, and smaller office spaces are in high demand – the Tri-Cities doesn’t have enough. The lack of new construction and continued growth of the area has created a short supply of commercial real estate. With many businesses incorporating “work from home” options following the pandemic, larger office spaces have been difficult to sell and lease. But, as employers are requesting employees to return to the office, we will begin to see a higher demand for larger office spaces. With recent interest rate spikes, investors have taken a short pause to see what the market will do. However, savvy investors recognize this to be a great time to buy property as interest rates are still below historical averages and now there is less competition. “Marry the property and date the rate” is what I advise my clients. Analysts predict this recession to be short and shallow, meaning that rates will decrease and when this happens, investors can refinance yet still have acquired a “trophy” property.

Q: Has construction for commercial developments increased or decreased?

A: New construction of commercial property has slowed down. This time not only because of supply issues, but also because of recent interest rate hikes causing construction projects to become more expensive. Lenders are also being more conservative in their lending. A combination of higher rates and stricter lending policies will continue to contribute to the local shortage in commercial real estate properties for the foreseeable future.

Q: What type of business or business industries are more prominent in local commercial developments?

A: We have demand for all types of commercial real estate for purchasing and leasing. Retail, warehouse, and small to medium-sized office spaces are in high demand. Multifamily developments are also needed due to housing shortages. As our community continues to grow and more individuals move to the Tri-Cities for employment, there will be more consumers and a great need for all kinds of commercial spaces.

Q: Do the investors and business owners tend to be local or from out-of-town?

A: Much of the commercial real estate in the area is locally owned. However, over the last couple of years we have seen many out-of-town investors. For example, we continue to see investors from bigger metros such as Seattle who sell their properties at a much higher price in their markets and come to areas like Tri-Cities to invest in multiple properties at lower prices. If you are a local property owner and are considering selling, right now is a great time to sell. There are many buyers in the market but not enough properties.

Q: How is the commercial real estate scene shaping the Tri-Cities, WA?

A: Our area is growing rapidly. Our market offers affordable housing, a family friendly community, job opportunities, and easy access to travel with our local airport – making the Tri-Cities a great place to live and invest. We are seeing companies like Amazon, Dairy Gold, Reser’s Fine Foods, and Local Bounti amongst others investing in the area. These large companies create additional employment opportunities, so more individuals are moving into the area to fill employment. As the population increases, we need more commercial space to accommodate the growth.

Q: Do you have any final thoughts to share?

A: The Tri-Cities is in sort of a protective bubble. In 2008, when the rest of the nation experienced a 15 to 20% reduction in property values, the Tri-Cities only saw a 0.1% reduction in property values. Yes, interest rates are increasing and there is fear due to many unknowns. However, we have a strong and healthy local economy backed by impactful local economic drivers, including the Hanford Site, strong agricultural and food processing industries, technology and scientific communities, outstanding medical care and facilities, great higher education options such as Washington State University Tri-Cities and Columbia Basin College, and a growing wine industry that is fueling tourism in our area. Additionally, the Tri-Cities is becoming a desired retirement destination. We truly live in a wonderful community – the Tri-Cities is a great place to live and offers uncapped opportunities for individuals and businesses alike!

We couldn’t agree more, Brenda. At Elite, we want to see the Tri-Cities, WA thrive and grow, thus we are committed to building our community literally and figuratively.

Now for the takeaway. If you are a business owner, investor, broker, or a real estate spectator in the general public, try not to fear the market uncertainties brought on by the recent rate increases. Instead, be assured that the Tri-Cities, WA remains a resilient commercial real estate market to sell, purchase, and invest.

Thank you to Brenda Garibay for the insights and being our featured guest in our industry-expert Q+A interview series.