The dynamics of health in the Seattle commercial real estate economy relate to the health of our overall economy. On this front, there has been some bad news for the formation of small businesses as it relates to Seattle. Our area ranks substantially behind other dynamic areas in the country as a function of our transportation ills. We have the fourth worst traffic in the country and that is a factor slowing growth in Seattle. If you also consider the committee formed by Seattle’s mayor to study potential rent control in the commercial area, the warning flags are out.
On the other hand, tourism is a $6.8 billion dollar industry in Seattle and last year the figure grew by 6 per cent. 38.1 Million visitors, $692 million in tax revenues, 7% foreign visitors, 42.3 million passengers passing through SeaTac airport, the $1.4 billion expansion of the Washington State Trade and Convention Center,and a boom in the hotel industry all point to robust growth. The ripple effect of this good news is evidenced by rising rents in the multi-family sector, industrial real estate being at a premium and a flight to the urban core for companies looking to lease office space while relying on the projected development of mass transit.
The picture for the long term investor is shiny, but with the next wave of multi-family construction saturating the market, common sense should be the rule of the day, not wild optimism.