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Seattle Experiences Steep Decline in Commercial Real Estate Sales

The latest research from the Commercial Brokers Association (CBA) shows commercial real estate investment activity in the Puget Sound region tumbled from nearly $5.6 billion in January through April 2019 to $1.99 billion for the same four-month period in 2020, which translates to a 64.4% decrease. Deal flow dropped from 661 deals in 2019 to 484 in 2020 during that January to April time period, a 26.8% decrease.

CRE experts say the pullback wasn’t entirely unexpected as a result of the hangover from Washington’s increased Real Estate Excise Tax (REET) that took effect in 2020. Still, the COVID-19 stay-home orders have exacerbated the market decline.

CBA’s Chris McDougall says, “We saw a big rush at the end of 2019 and knew we’d see some drop off in sales [this year]. Certainly, that was what we saw the first couple of months and then COVID came along and it changed everything.”

A report by CBA shows the number of transactions from January 2020 compared to 2019 were down 18.7%, and dollar volume was down 69%. February transactions experienced a 7.8% drop and dollar volume dropped of 69%. March transactions decreased 14.1%, but dollar volume was softened by the sale of the former Macy’s department store in downtown Seattle for $68.7 million, which made the decrease a more modest 42.2%.

Overall, the biggest discrepancies in volumes were seen in the office (-76.3%) and multifamily (-78%) classes, reports CBA. The smallest declines in volume were retail (-14.1%) and land (-15.2%). Multiple large deals in 2019 greatly affected sales volume disparities. In comparison, 2020 has recorded only one nine-figure deal with the $401.5 million office sale of Tower 333 in downtown Bellevue.

McDougall added, “Consistently, the thing I hear from member firms is hopefully April was the low point and things will pick up from there. The question is, how long will it take to get back to higher and sustained levels. They are cautiously optimistic that April was the trough. I am hearing the phones are starting to ring more and that’s a sign that activity levels are picking back up.”

Read more at CBA Report

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Inside The Story

About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.

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