As we pass the midpoint of February 2018, our team of professionals aggressively works to keep abreast of changes in the market. We look for trends, changes in lease standards, product availability and more. We attend seminars, read articles and process over 200 years of real estate experience. Here are some of the things that we see, starting with Industrial Real Estate.
Industrial in close to the Seattle CBD is in high demand and low supply. From a generational standpoint, we see some properties becoming available as is the case with Oberto’s. Art is still alive, and the company and family will no doubt sell to a national and cash in their chips. For sure they are most likely to leave Seattle, maintain their Kent manufacturing facility, and like others of that generation, liquidate their real estate holdings in Seattle. The bare bones warehouses are pushing $150 per square foot and land is running north of $65 per square foot towards $85.
Retail commercial real estate is changing with large parcels of well located land with smaller buildings on them being fought over for redevelopment into Mixed Use residential projects. Multi-Family rents are plateauing and inducements to rent such as lease deposits and free rent are appearing. Office rents are climbing and small “cheap” office spaces simply do not exist.
Most professionals see the market continuing its bull run with pessimism stemming from a free spending gathering of politicians in Olympia where the legislative and executive are clearly in Democratic hands. Nationally, look for interest rates to rise (link to article about $10B of bonds going on the market starting in October). One of our professionals talked to a major contractor in business in Seattle for decades. He had an interesting metric for the economy. He watches the prices of single family homes. When the price increases are into double digits, that leaves a year or more until things start to slide. We are there….