Commercial Real Estate Report Seattle – Q2 2022
Seattle Commercial Real Estate Market Q2
Is the commercial real estate market slowing down or is it picking up
Seattle commercial real estate covers several different sectors, including but not limited to retail, office, and multi-family. We will look at those three sectors to determine the status of the Seattle commercial real estate market during the second quarter of 2022.
Seattle Office Buildings
Companies continue to figure out the hybrid model, which led to a reduction in office purchases. That being said, the Eastside continued to excel with vacancy rates at just 5.4%. Cascade Public Media purchased a property at 316 Broadway that was built in 2004. Sold by Childhaven, who owned the land for a century, the Capitol Hill property sits on 52,620 square feet. The 4 story property changed hands for $437.10 per square foot, or $23 million. CPM plans to convert the space to office and broadcast use.
While quite a few significant office sales occurred during the second quarter, it was especially seen in South Lake Union. For instance, the Lake Union Building, a seven story office building at 1700 Westlake Ave. N, was sold by local company Cairn West. The price was $740 per square foot for the 90,600 square foot building. The $67 million price tag also includes a 61 slip marina. An older office building, 425 Pontius, has been bought for $39.9 million or $530 per square foot. San Francisco company Swift Real Estate Partners acquired the property from SP Real Estate Fund 2 LLC. BioMed Realty purchased a building fully leased by Meta in South Lake Union for $151.5 million . The 154,000 square foot building, located at 1101 Westlake Ave. N, is six stories and was sold by Invesco.
Seattle Retail Market
The local retail market held steadfast during the second quarter. Consumer spending sustained despite inflation and the possibility of a recession. For instance, in April, retail sales rose .9% month over month nationally. Located at 4916 Rainier Ave. S, Columbia City Theater sold in April. CCT Associates LLC sold the property to nonprofit Cultural Space Agency for $653 per square foot, or $3.2 million. Built in 1920, the property has approximately 4,900sf. Prado Group purchased 9,358 square feet of retail space in Capitol Hill at 1201 Pine St. from Dunham Gay. The storefront sold for $534.30 per square foot, bringing the total to $5 million.
Pennsylvania based Toll Brothers, Inc. has sold a 3 building portfolio in Belltown. The portfolio included 2 retail buildings as well as a 40 unit multifamily building. The square footage totals 30,263 and the property sold for $29 million to South Carolina company Greystar Real Estate Partners. Located at 2302, 2306-2310, as well as 2312-2316 4th Ave., the buildings sold for $958.27 per square foot.
Seattle’s industrial rent growth continued to be strong despite repricing due to inflation and rising interest rates. Importantly, sales remained steady as well in the second quarter. For example, a warehouse in the Greenwood/Fremont area sold in April for $3.4 million. The 4,797sf building was built in 1985. The price per square foot for the vacant property located at 120 NW Canal Street was $708.78 per square foot. The Original Rainer Brewery located at 5900 Airport Way S was purchased by Portland based ScanlanKemperBard in June. The four building creative industrial maker space has 193,908sf and occupies 6.5 acres. The price per square foot was $194.51, and the property sold for just shy of $36.5 million.
Similarly, buildings housing brewery Hale’s Ales also changed owners at the beginning of June. San Francisco company Redco Development bought three attached buildings at 4301 Leary Way NW for $8 million. The buildings sit on over half an acre and total approximately 35,750 square feet. The price per square foot was $224.
Multi-Family Sales and Development
The cost of single family homes in the area continued to rise, and so there continued to be a high demand for apartments . The multifamily sector did well with both sales and development. A Belltown high rise apartment site sold for $29 million. Greystar purchased 2302 Fourth Ave. through an LLC from Toll Brothers for about $1,492 per square foot. In Redmond, 2120 152nd Ave. N, sold to an LLC associated with Johnson Carr for $7 million, $208 per square foot for the land. Architect SHW filed plans for an eight story apartment building. The building currently includes underground parking and retail space.
The Jacobson Company sold Alley24 in South Lake Union to California developer Pacific Urban Investors. The 172 unit property has one and two bedroom apartments as well as lofts and townhomes. Built in 2006 and renovated in 2014, it sold for $90 million, so $523,256 per unit. Velo Apartments located at 301 E Roy St. in Capitol Hill sold for $290,816 per unit, or $14.5 million. The student housing building was constructed in 1966 and has 49 units. It was sold in May to a local private investor. It’s considered to be highly marketable due to the unobstructed views of Lake Union and the Downtown skyline.
Does the Future Look Brighter for the Seattle Job Market?
According to Washington State Economic and Revenue Update, the economy continued to recover statewide throughout the second quarter. Nationwide, the unemployment rate has remained steady at 3.6% since March. Similarly, Washington’s unemployment rate was at 3.9%, but the Seattle/Bellevue/Everette area had an unemployment rate of just 2.6%. Notably, manufacturing and construction sectors saw the most significant rise in employment throughout the state.
Where Can I Find a Seattle Commercial Real Estate Broker?
There are many Seattle real estate companies, but Ewing & Clark has been providing our city with real estate service since 1900. Feel free to reach out to Ewing and Clark or one of our Seattle real estate agents that knows the Seattle commercial real estate market. If you prefer, start today on our Greater Seattle commercial MLS search and let us know what you want to see.