As we head into the fall of 2020, the landscape by Covid is changing the face of Seattle commercial real estate. In March the Business Journal published an article which sited the Satsjobaden Agreement in Sweden. This emphasized how labor and business must learn to collaborate based upon the premise that “the inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries”. “Business is all about growing the pie…politics is all about how to divide the pie and less concerned about how to grow it”. The article then stresses that two things in Sweden made the difference for their society. Collaboration and Communication.
The collision of philosophies is no more apparent than in the actions of Seattle of a decade ago and today. Seattle took to heart the issue of urban sprawl and worked to engender commercial real estate development that fostered investment in its urban core and created a live/work environment with proximity of services for both. This lead, to the creation by Amazon of 50,000 jobs in Seattle as its world headquarters and multi-family growth like weeds, all over the city. The flow of workers from Capital Hill to Lake Union was like water flowing over a burst dam in the morning and a receding tide in the afternoon. Then Covid hit as well as a Head Tax from the City Council.
A recent article touted that construction in Seattle currently totaled 7.1 Million square feet. That pales by the continued announcements of new construction in Bellevue. Amazon’s national search for HQ 2 was touted to have 25,000 employees in Virginia. This seems minimal now in the context of their plans to have 28,000 employees in Bellevue alone.
Fall is a season that comes about with a return to darker days. Seattle Commercial Real Estate likes the long term potential of downtown Seattle, but the fall is going to bring with it the demise of revenue for the City of Seattle and we forecast darker days ahead until the politics of the city turn to collaboration in order to create an environment that fosters growth instead of divisiveness.