A measure used by the commercial real estate business of the health of the economy is to monitor retail sales. The State of Washington reports quarterly taxable retail sales. Last quarter the sales volume went up nearly 9% to a whopping $37.6 Billion. That means that the economy in all areas, excluding construction and services is doing amazingly well. This is a good barometer to keep an eye on.
At the same time Washington State is number 1 in another area of industry in the US. We are the top state for the sale of recreational cannabis. We sold $850.9 Million worth of recreational pot in 2017 while the entire US industry sold $3.2 Billion. The impact on commercial real estate of this industry has been felt by every commercial broker. The money floating around has materially impacted commercial real estate. The issue is the legality of financing. Since pot is illegal nationally, the Federal Government won’t approve property loans and in fact will call the loan if a property is leased to someone in the industry. There are few banks who will accept money from the legal pot industry. If these problems are solved, you can reasonably expect a wave of commercial real estate investment that will astound people.
An interesting impact of pot relates to commercial real estate and the expansion of companies like Facebook in our area. The company is taking small leases in multiple locations in Bellevue as a potential precursor. We Work has expanded in our area and has or is going to lease 902,000 square of office space in Greater Seattle. The client base is the millennial and the most popular recreational drug is….pot. As the professionals from Seattle Commercial Real Estate have postulated, there is an impact on commercial real estate…
