The impact on commercial real estate and the growth of Seattle can best be analyzed by looking at the increase in core office space. From 2015-2017 Seattle added 8.9 Million square feet of rental office space. The current value of new projects in Seattle is estimated at $13.5 Billion and projects in 2018 were completed to the tune of $4.8 Billion. In addition to offices, Seattle added 38,000 mostly multifamily housing units and the cherry on the top was the creation of 127,000 jobs since 2010. Under construction scheduled for completion in 2022 is the addition to the convention center at a cost of $1.7 Billion.
In the restaurant business the maxim is to not sell the steak, but sell the sizzle and Seattle has plenty of sizzle, so what could possibly go wrong? The answer is simple: a changing political climate. Washington State politics are overwhelmingly liberal. A recent example of addressing this liberalism was the attempt by the Seattle City Council to impose a Head Tax to pay for social welfare programs. It was batted down with exceptionally strong responses from the likes of Amazon, Facebook and in general, the business community. The council elections for this fall are shaping up, and as a result of the coming election, the makeup of the council is expected to become even more liberal.
Commercial real estate survives and prospers as part of a collaborative environment which fosters growth. The fear in the business community is best exemplified by Amazon’s putting up for sublease almost 750,000 square feet of committed office space and their growth in terms of taking space in the Bellevue downtown core. This is more particularly of interest in the context of their withdrawal from the HQ 2 site, which the company picked in New York where the politicians objected over the analysis done by the State of New York in terms of the economic benefit.
Seattle Commercial Real Estate suggests that it might be a good time to hold back a tad to see how the political winds end up blowing…