With the lifting of the Covid guidelines by the CDC, it is like a fresh breath of air, which now you can take unmasked. But let’s look critically at other factors at work that will affect Seattle commercial real estate. We can start with offices where workers in the Northwest beat the rest of the US with 52% of workers from home completing their work in fewer hours. The study focused on companies with 500 or more employees and showed that 70% said that the experience of working from home was better than expected with added benefits of family time and a more balanced life. Oops, the flip side was that 62% of employees with dependents are eager to return to office on a national level and 67% in the Northwest. This portends for a transition back to offices, as most, if not all younger employees want to work in an office environment.
Office users like the amenities of working in a collaborative environment, but the issue remains the support services. On both a national and local level there is a shortage of labor, which affects the service industries and thus areas of commercial real estate especially in retail real estate. That is the basis of work for restaurants, bars, and all forms of services. This same dynamic exists in the hotel and lodging industry. In Seattle, with the issue of the cruise ship industry still in question for Alaska as of mid-May, there is a collective holding of breath. The issue is further reliant in the long run by making the City of Seattle a tourist mecca again with conventions leading the way, but the taint of the 2020 “Summer of Love” and riots is making the task ever more difficult.
Office demand is represented as being as great as pre-Covid, but the demand means employees need services and above all else, safety. Yet another study notes that demand for jobs in the tech sector in Seattle is down 29% over demand in 2020.
The rising demand for consumer goods, internet shopping, a climb in jobless numbers and a shortage of labor combined with the thrust in the nations’ capitol to raise more taxes and government spending is troubling. The professionals of Seattle Commercial Real Estate see clear signs of other historical cycles, which lead inevitably to a downturn in the economy as part of an inflationary cycle. It is a great time to have real equity and low debt, for the commercial real estate business cycle is as sure a thing as rain in Seattle, and there are new warning signs cropping up every month. Seattle Commercial Real Estate is prepared, and our clients are prepared. Are you?