Seattle has the seventh-best commercial real estate market in the country, according to a recent report from the Urban Land Institute, and recently released Third Quarter reports were positive.
Amazon’s growth continues to garner national headlines for Seattle’s office market. After already leasing a considerable amount of space in 2012 and announcing the development of a million new sf of office space in three buildings downtown, Amazon also said it will buy its 1.8 million sf South Lake Union campus from Vulcan Real Estate for $1.16 billion. While Amazon has been responsible for much growth in the office market, CoStar, a source of commercial real estate information, reports that the area’s overall office vacancy was flat during Third Quarter at 10.8%.
The apartment market remains another bright spot, but vacancy was fairly flat at just under 5% in Third Quarter, according to Dupre + Scott Apartment Advisors. Rents have been rising moderately in recent months, and Dupre + Scott reports that managers plan to raise rents during the winter. Construction has been ramping up in recent years, so we’ll start to see more apartment deliveries in 2013.
The industrial market was fairly flat during Third Quarter, CoStar reported, with vacancy at 6.2% and a little more than 100,000 sf absorbed. First and Second Quarters were both very strong quarters for the industrial market, so year-to-date absorption stands at more than 3 million sf.
The retail market showed improvement during Third Quarter, with vacancy falling three percentage points to 5.5%, according to CoStar, and nearly half a million sf of absorption. Rental rates were down slightly, but are still up from a year ago.
Seattle’s commercial real estate market is expected to continue to improve in 2013. Contact your NBS Financial Services Finance Officer to discuss your next financing transaction.
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