Amazon continues to absorb Seattle office space at a huge rate. They are projected to occupy approximately 13 million square feet in the Seattle Headquarters by 2021. Seattle commercial real estate continues to grow unabated with over 64 cranes on our landscape leading the nation in the number of cranes giving clear evidence of our leadership in the world of commercial real estate.
Today we are starting to see the flattening of the rates of increase in multi-family rents. The evidence of a change in the market is the emergence of projects that have gone through the approval process now being marketed for “others” to build. One client confirmed this status by putting two major projects on the market and has impending closings this spring. Another developer is selling his Columbia City project on the market subject to MUP approval for $50,000 per unit. Both clients are using a construction cost projection of $200 per square foot.
There is another factor which commercial real estate developers and owners is the new tax law. It is widely anticipated with the reduction on the limits of interest on real estate, that many potential homeowners in a high cost market such as Seattle will become renters. Having made that statement, in King County we have less than a 30 day supply of condominiums, so multifamily developers and looking at this lucrative multi-family option with recent sales in small size units running at $1,000 a square foot.
Retail projects are experiencing the “Amazon” Effect and the demand for industrial land prices are looking to exceed the $80 per square foot level in Seattle. $40, if you can find vacant land.