From tech companies opening new employment hubs to individuals returning to the office, the in-migration to the Seattle market over the past few years has steadily continued during the COVID-19 recovery era. While the pandemic set the real estate market back, Seattle not only persisted but thrived. In the face of the events of 2020, Seattle has been named the fastest-growing big U.S. city, highlighting the market’s agility in times of crisis and its overall long-view potential.
Put simply, the past few months have clearly shown that the Seattle market is back and better than ever.
Investors See Seattle as a “Sure Thing”
In recent years, shrewd investors have taken notice of Seattle’s overall growth. A trend that can be perfectly illustrated by the massive expansion in both opportunities and competition within the Eastside suburbs—which has even, at times, outperformed the downtown market. This rise in Seattle’s suburbs has drawn in additional interest throughout the area as a whole as it proves to be a dependable yet expanding investment opportunity. Berkadia Seattle recently announced the sale of Capitol Crossing, which adequately demonstrated the extreme competition and aggressive capital that multifamily properties in the Seattle area have generated.
Investors from across the country, and swaths from California, have taken notice. Over the past 14 months, we’ve seen increased investor activity not only from the large institutional players, but also from family offices and high-net-worth individuals. More and more we are seeing smaller groups break into commercial real estate investing, as it has proven to be a sound asset for those with their eye trained on the horizon.
Tech Industry Drives Local Demand
Over the past decade, large technology companies like Amazon, Facebook and Google have all established offices in the Seattle area, with the majority of concentration in downtown Seattle. Recently this shift has intensified and expanded to the Eastside suburbs of Kirkland, Bellevue, Redmond and beyond. As more and more individuals look to relocate for work, commercial real estate booms with eager developers and investors ready, willing and able to meet this new demand.
In addition to the companies setting up shop in the area, we’ve also seen significant in-migration driven by individuals able to work remotely. Overall, these individuals are looking for respite from high-cost west coast cities and have been drawn to the lower cost-of-living and larger accommodations of Seattle. But with a 14.8% annual increase in median single-family home prices, more and more of these individuals continue to choose renting over homeownership.
All of these factors together have driven demand for Class A construction opportunities throughout the area—and particularly in the Eastside. Low interest and debt financing opportunities have also been critical factors in the local market’s success.
Looking Ahead for Seattle
Seattle has proven to be “the” area for individuals, businesses and investors alike. Despite talk of inflation or rising interest rates, Seattle’s continued investment in infrastructure—like corporate headquarters or other large office hubs—signals that businesses and their employees are here for the long-haul. From this, we are confident we will continue to see strong fundamentals and related demand in our area for years to come.
As employees return to the office, and the buzz of life returns to downtown, confidence is radiating towards what the future holds for our Seattle market—and it’s bullish.