The spate of recent news articles concerning commercial real estate makes for interesting reading. For example, the largest multi-family project on the Eastside in the Overlake-Spring District area has 618 units on a former 6 acre shopping center site. The units are renting for $3.12 per square foot per month and the project is 82% leased. Exciting. Right down the street in the Microsoft Headquarters site, four original buildings have been torn down and six new office buildings are under construction to add approximately another 5,000 employees to the area.
On the same day, another article appeared which noted that non-residential construction (churches, office buildings, industrial real estate) is down 17% this year. Construction from the peak is down 28% during the first seven months of this year in King, Snohomish, and Pierce counties. Single family residential real estate is down 39% in the same counties and yet… Rent concessions are disappearing and the absorption of new multi-family units and office, particularly in Bellevue/Redmond is going crazy. 2.4% is the vacancy rate for Bellevue and Redmond and rental rates are rising. This follows a recent increase in vacancy in Seattle which now appears to absorb the supply of new units with rents on the rise again.
At the same time, an outgoing Seattle City councilman is proposing restrictive environmental legislation for Seattle that would effectively outlaw oil heat, natural gas heat and substitute HVAC and higher electrical consumption which would come from…where? Stay tuned. Seattle Commercial Real Estate is watching all of these floating signals and, as always, we are looking out for the best interest of our clients.