1031 Exchange in Kennewick Richland MSA
The Kennewick-Richland MSA (Tri-Cities) offers solid 1031 exchange opportunities with competitive property taxes (0.82-1.00%), balanced housing market conditions, and a diversified economy anchored by research & development, food processing, and healthcare in southeast Washington.
Population
185,685
Key Industries
Research & Development (Pacific Northwest National Laboratory), Food Processing (Lamb Weston 3,000 workers), Healthcare (largest sector)
Table of Contents
Information is for educational purposes only. Consult qualified professionals for specific advice.
Local Tax Considerations
Property taxes, transfer taxes, and local incentives
Property Tax Rates
Average Rate
0.80% - 1.00%
Assessment Method
Assessed Value (Washington State Property Tax Code)
MSA rate (0.82-1.00%) vs State average (0.88%)
Competitive with state average
Transfer Taxes & Fees
Transfer Tax Rate
1.28% state + local rates
Washington state real estate excise tax plus local recording fees
Local Tax Incentives
Washington State Enterprise Zones
Tax incentives for business development and job creation
Eligibility: Qualifying commercial and industrial developments
Tri-Cities Development Incentives
Local incentives for business expansion and retention
Eligibility: Companies creating jobs and investing in the area
Opportunity Zones
Number of Zones
3
Key Locations
- Kennewick Downtown
- Pasco Industrial
- Rural Benton County
Opportunity Zones offer significant tax benefits for long-term investments, including deferral and potential elimination of capital gains taxes.
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Market Profile Dashboard
Economic indicators and market trends
Population
185,685
Growth: +1.8% annually
Median Income
$83,053
Unemployment
4.2%
Job Growth
+2.1% annually
Economic Drivers
Market Trends
Median Home Price
$425,000 - $550,000
Average Rent
$1,685/mo
Cap Rates
6.5% - 8.5%
Demographics
Median Age
36.4 years
Bachelor's Degree+
34.8%
Owner Occupied
67.2%
Property Type Analysis
Investment opportunities by asset class
Multifamily
Steady demand from research professionals, healthcare workers, and food processing employees with balanced market conditions.
Market Metrics
- Cap Rates: 7.8%
- Vacancy Trends: Low vacancy at 7.2% due to diverse employment base
- Demand Forecast: Stable fundamentals with research and healthcare employment
Risk Factors
- Mixed price trends
- Balanced market conditions
Opportunities
- Diverse employment base
- Research professional demand
- Competitive property taxes
Single-Family Rental
Popular with research professionals, healthcare workers, and families seeking quality housing in stable market.
Market Metrics
- Cap Rates: 8.2%
- Vacancy Trends: Low vacancy at 5.8% with good tenant retention
- Demand Forecast: Steady fundamentals with major employer stability
Risk Factors
- Higher home values
- Mixed appreciation trends
Opportunities
- Quality tenant base
- Major employer stability
- Competitive carrying costs
Neighborhood Spotlights
Up-and-coming areas and investment hotspots
Richland
Higher-income area with research employment and quality amenities
Investment Thesis
Higher-income demographics, Pacific Northwest National Laboratory proximity, and quality housing stock appeal to research professionals.
Median Price
$550,000
Price Growth
-2.7% YoY
Rental Yield
6.8%
Days on Market
50 days
Key Highlights
Development Pipeline
Residential development and research facility expansion
Kennewick
Commercial and residential center with diverse employment base
Investment Thesis
Balanced demographics, commercial center location, and diverse employment supporting consistent rental demand.
Median Price
$475,000
Price Growth
+3.7% YoY
Rental Yield
7.5%
Days on Market
45 days
Key Highlights
Development Pipeline
Commercial and residential development projects
Pasco
Agricultural and industrial area with affordable housing options
Investment Thesis
Agricultural employment base, industrial development, and more affordable entry points for investors.
Median Price
$425,000
Price Growth
+4.2% YoY
Rental Yield
8.2%
Days on Market
52 days
Key Highlights
Development Pipeline
Industrial and agricultural development
West Richland
Suburban area with family appeal and growth potential
Investment Thesis
Family demographics, suburban appeal, and proximity to employment centers creating rental demand.
Median Price
$485,000
Price Growth
+2.8% YoY
Rental Yield
7.2%
Days on Market
48 days
Key Highlights
Development Pipeline
Suburban residential development
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Compare Markets
See how this MSA stacks up against others
Compare Markets
| Metric | Kennewick Richland (Current) | Spokane Spokane Valley | Yakima | Bellingham |
|---|---|---|---|---|
| Population | 4.0M | 4.0M | 4.0M | 4.0M |
| Median Property Price | $750K | $750K | $750K | $750K |
| Average Cap Rate | 5.2% | 5.2% | 5.2% | 5.2% |
| Job Growth Rate | 2.1% | 2.1% | 2.1% | 2.1% |
| Rental Yield | 4.8% | 4.8% | 4.8% | 4.8% |
| Days on Market | 25 | 25 | 25 | 25 |
Frequently Asked Questions
Common questions about Kennewick Richland 1031 exchanges
The Tri-Cities offers competitive property taxes (0.82-1.00% vs. 1.02% national), balanced housing market conditions, diversified economy anchored by Pacific Northwest National Laboratory research, Lamb Weston food processing (3,000 workers), and healthcare sector leadership providing stable employment for 139,000 workers.
The diverse employment base provides stability: Pacific Northwest National Laboratory (research professionals), Lamb Weston (3,000 food processing workers), healthcare sector (largest employment), Kennewick Schools (3,043 workers), and environmental remediation (WRPS 2,336 workers) create consistent rental demand across income levels.
Yes, three opportunity zones exist: Kennewick Downtown, Pasco Industrial, and Rural Benton County. These offer potential tax benefits for qualifying investments including deferral and possible exclusion of capital gains for long-term investments in designated areas.
The economy is anchored by research & development (Pacific Northwest National Laboratory), food processing (Lamb Weston 3,000 workers), healthcare (largest sector), education (3,043 school employees), environmental remediation (2,336 WRPS workers), manufacturing, and agriculture, providing exceptional economic diversity.
The balanced market (supply and demand equilibrium) provides stability with reasonable days on market (43-57 days), good inventory levels, mixed but stable price trends, and consistent rental demand from the diverse employment base, reducing volatility for long-term investors.