Seattle & Northwest CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
Seattle Can Accommodate Additional Growth
By Dennis Kaiser
Seattle is a market on the move. Not only is it booming from a corporate and tech company expansion perspective, the commercial real estate sector is arguably the hottest in the U.S. Connect Media will be hosting Connect Seattle, an afternoon conference on November 7th to talk about all of that growth and hear what is next for the Emerald City. One of the CRE industry leaders slated to participate in the discussion is Madison Marquette’s Dan Meyers. He manages the company’s Seattle-based assets, with a primary focus on leading redevelopment efforts at Pacific Place, a 335,000-square-foot retail property in downtown Seattle. Check out his insights below in our latest 3 CRE Q&A.
Q: What are some of the overarching trends you are tracking in Seattle?
A: Seattle continues to be an economical choice compared to the Bay Area and other tech cities. Even though we have recently experienced huge growth in the city, there is still capacity for much more growth. We have lots of developable land compared to San Francisco and other older cities. Transportation will continue to be a big restraint, but the recent expansion of the transit system is a positive move in the right direction. Tourism (both internationally and nationally) will continue to be an important aspect of Seattle’s economy. Two things that will continue to enhance this growth are the expansion of the Convention Center, and planned addition of another cruise ship terminal near Pioneer Square. As the Hwy 99 tunnel opens and the Waterfront Park construction starts, the city needs to look to think about what the next BIG idea will be to continue to move Seattle into the International spotlight of a city with a bright future.
Q: How are the overall market conditions impacting commercial real estate markets and decisions?
A: Office rents are going in the right direction and will continue to grow as supply continues to tighten (especially on the Eastside). Retail rents are comparatively low compared to other similar cities, but sales are growing. The national retail trends will continue to re-shape retail in Seattle, moving towards experiential, food and beverage, and entertainment concepts. Apartment rents seem to be leveling out, as supply expands. Condo supply is low mainly due to legal risks that most developers do not want to deal with. Construction and labor costs are extremely high, causing an imbalance between revenues and expenses.
Q: What advice do you have for clients looking for opportunities in the Puget Sound, whether that be a new tenant office space requirement, or for those seeking a development site or an investor seeking to buy?
A: Seattle will continue to be a great long-term real estate investment for the foreseeable future. I think growth along the new Waterfront Park, Pioneer Square, and SODO have great upside. I think the most important risk currently in Seattle are the problems associated with crime, homelessness, mental illness, and drug use. City government and businesses need to work together to produce solutions for this epidemic that plagues our city. Although Seattle continues to be a desirable place to invest, these issues will impact future returns on real estate investments.
For comments, questions or concerns, please contact Dennis Kaiser
- ◦Development
