Jokingly, commercial real estate professionals call the construction cranes in downtown Seattle the new symbol of the city, not the iconic Space Needle. The evidence is staggering: 670 hotel rooms were built in the last six years and 5073 rooms will open in 2017 and 2018; 14 million square feet of office construction is in the pipeline, which is 2 million more square feet than was built in the eleven years between 2005 and 2016; 37 buildings got completed last year and 64 are scheduled for the ensuing year. That is the front page news.
On the back page is a little article noting that 40% of the total jobs in the State of Washington are tied to trade and, by the way 48,000 is the number jobs tied to the $4.3Billion in trade through the ports of Seattle and Tacoma. The speculation concerns the opening of the new Panama Canal and what would happen to the port industry.
Here is where we excel. Judged by a “real adjusted salary” which factors in taxes and cost of living Seattle is the best place to work in the entire country. If you don’t believe it, the multiple residential housing market in Seattle had the third highest growth in rents in the US and Tacoma rents rose even faster than those in Seattle. The trading frenzy in downtown high rise office buildings continues unabated with Hines liquidating holds to the tune of $1.16 Billion. And, the US Developer of the year according to NAIOP is Touchstone.
The back page now comes back to haunt us. Corporate earnings growth has dropped significantly, will the US Dollar remain strong, how much will sophisticated investors reallocate to safety, how much volatility really exists in the US markets and China? Seattle Commercial Real Estate LLC gets more conservative when things are seemingly so good no one can make a mistake. Read the winds and make good long term decisions.