Seattle Commercial Real Estate in a 2017 posting , discussed the soaring prospects of two dynamic industries in the Seattle commercial real estate market. It is time in June of 2020 to look back and maybe again look forward.
Boeing ended May by reducing their work force by 6,700 employees and the number is anticipated to go to 10,000. At the same time, with hundreds of planes parked on the ground for the issues with the 737 Max program, they are gearing up the production lines in Renton and elsewhere. The unquestioned trend is to automation and this downturn will certainly accelerate the trend. Orders for all planes have been affected with the Corona Virus epidemic. Delays, cancellations, surplus aircraft, all factor in against retirement of aging fleets and planes no longer fuel efficient. Every employee layoff on a basic industry means a total of 1.5 people who are affected. There is genuine concern that Boeing is in trouble and that is true on the commercial end while the military and unrelated businesses (drones, technology, etc.) are booming. Simply put Boeing is too big to fail as we learned in the 2008 downturn when government stepped in to help the banks.
In the same article in 2017 we addressed the health care industry and its relationship to commercial real estate. It is still a dynamic part of our economy and the loss of 1500 jobs at the U of Washington Hospital while the medical school is gaining prominence in the Corvid 19 fight is the contrarian side of the industry. Research and new therapeutics are the norm of the day.
All these negative factors must be viewed in the context of their impact on commercial real estate in Seattle. Yet, we have been there before (link its called a cycle) and we will be there again. Longevity in security in commercial real estate leasing and commercial real estate investments is why Seattle Commercial Real Estate is still in business in this dynamic industry.
