NKF’s Kevin Shannon: Why Seattle Reigns King
By Dennis Kaiser
Seattle is one of the hottest CRE markets in the United States. It earned the title of Biggest Company Town in America, a position it achieved riding the explosive growth of Amazon, and it is enjoying an unprecedented construction boom, reflected in it earning the crown of Crane Capital of America.
To gain a better understanding of Seattle and the Puget Sound, Connect Media asked NKF’s Kevin Shannon, one of the nation’s most active CRE investment brokers, to share why the Pacific Northwest market is in demand. Here’s what he had to say in our latest 3 CRE Q&A.
Q: What are the big trends that you are tracking relative to the Seattle market?
A: The biggest trend for the Seattle/Puget Sound area is continued absorption fueled primarily by the technology companies. However, it isn’t the only industry in Seattle, as Starbucks, Costco and Boeing all have a big presence in Seattle.
Q: What are the drivers in the market?
A: What continues to drive market growth is the region’s comparative lower cost of office space, as well as its lower cost of housing compared to NorCal. Housing costs in the Puget Sound region are at about 60% of what it is in NorCal, with wages also in a similar range to NorCal when you reconcile the lack of income tax in the State of Washington.
It’s relatively easy for tech companies such as Facebook and Google to replicate their NorCal footprint in the Puget Sound area on a smaller scale, due to the area’s well educated labor pool. You are also seeing other tech companies starting to do the same, replicating their NorCal footprint due to this region’s lower cost of living, in conjunction with the abundant supply of talented labor.
Q: Can you give any examples of what’s on the horizon that you see?
A: Looking ahead, when you talk about the Puget Sound area, the big drivers will continue to be the growth of mostly technology companies in the region. The Seattle/Puget Sound market is leading the country in absorption this year and we expect that trend to continue, especially with continued big space commitments from the likes of Amazon, F5 Networks, Facebook, Google etc. in Bellevue and Seattle.
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