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How Well Do You Know The Seattle CRE Investment Landscape?

How Well Do You Know The Seattle CRE Investment Landscape?

Seattle has become a major hot spot for the tech industry. Companies like Amazon and Snapchat are grabbing a greater share of the metro area’s office market while demand for Class-A multifamily rises as higher-paid tech workers move in. Meanwhile, the growing popularity of e-commerce has put pressure on Seattle’s industrial supply, which already has historically low vacancies. 

Think you know the ins and outs of Seattle’s commercial real estate investment market? Take this quiz from JPMorgan Chase

1

What is the median income in Seattle?

$40K
$60K
$80K
$100K

YOU'RE CORRECT!

The influx of tech firms and Fortune 500 companies into Seattle has led to a growing population of highly paid workers in the metro area. In 2016, Seattle experienced the greatest income increase across the 50 most-populous U.S. cities, with median income rising $10K to $80K. Wealthier residents have sought out Class-A multifamily units Downtown, strengthening an already robust investment market. Apartment vacancy rates have remained under 4% while transit-oriented developments remain desirable for renters, according to Marcus & Millichap. Apartments within a 30-minute to an hour commute to Downtown Seattle are drawing investors and renters, JPMorgan Chase Senior Manager Nicholas Bley said.

YOU'RE WRONG!

The influx of tech firms and Fortune 500 companies into Seattle has led to a growing population of highly paid workers in the metro area. In 2016, Seattle experienced the greatest income increase across the 50 most-populous U.S. cities, with median income rising $10K to $80K. Wealthier residents have sought out Class-A multifamily units Downtown, strengthening an already robust investment market. Apartment vacancy rates have remained under 4% while transit-oriented developments remain desirable for renters, according to Marcus & Millichap. Apartments within a 30-minute to an hour commute to Downtown Seattle are drawing investors and renters, JPMorgan Chase Senior Manager Nicholas Bley said.

2

By how much did effective multifamily rents in Seattle increase in 2017?

3%
5.2%
6.7%
7.2%

YOU'RE CORRECT!

Rising home prices have fueled demand for multifamily housing. The metro area’s median home price has risen 7.9% since 2016, reaching $446,500 in 2017, according to Marcus & Millichap. This in turn has led to a 7.2% increase in effective multifamily rents. Investors are increasingly considering assets beyond the urban core as values have steadily risen. In nearby Everett, for example, the average price per unit rose 3% to $164,700/unit. Investors are also keeping an eye on how the 15,200 units that came online in 2017 will impact vacancy rates and effective rents.

YOU'RE WRONG!

Rising home prices have fueled demand for multifamily housing. The metro area’s median home price has risen 7.9% since 2016, reaching $446,500 in 2017, according to Marcus & Millichap. This in turn has led to a 7.2% increase in effective multifamily rents. Investors are increasingly considering assets beyond the urban core as values have steadily risen. In nearby Everett, for example, the average price per unit rose 3% to $164,700/unit. Investors are also keeping an eye on how the 15,200 units that came online in 2017 will impact vacancy rates and effective rents.

3

How much office space does Amazon occupy in Seattle?

5.2M SF
12.3M SF
13.6M SF
20.5M SF

YOU'RE CORRECT!

Amazon occupies 13.6M SF in Seattle, making it one of the largest Downtown leaseholders. The influence of tech companies continues to drive the Puget Sound office market, JPMorgan Chase Regional Sales Manager David Diggs said. Google and Apple have expressed interest in expanding operations in Seattle, and Snapchat recently acquired 47K SF of office space in Belltown, according to a Colliers report. Amazon also made a 369K SF purchase in Bellevue in Q3.

YOU'RE WRONG!

Amazon occupies 13.6M SF in Seattle, making it one of the largest Downtown leaseholders. The influence of tech companies continues to drive the Puget Sound office market, JPMorgan Chase Regional Sales Manager David Diggs said. Google and Apple have expressed interest in expanding operations in Seattle, and Snapchat recently acquired 47K SF of office space in Belltown, according to a Colliers report. Amazon also made a 369K SF purchase in Bellevue in Q3.

4

Which was a notable office transaction in 2017?

NorthEdge
Market Place Tower
Columbia Center
Park Place

YOU'RE CORRECT!

Clarion Partners paid $158M for Tableau Software's NorthEdge HQ, a 209K SF, Class-A office building in Lake Union. NorthEdge is on the site of King County Metro's former bus stop maintenance shop. Clarion has been buying a significant number of properties in the Puget Sound region.

The purchase hints at a warming office market. Office vacancies dropped to 7.5% in Q3, compared to 7.7% in the previous quarter, according to Colliers.

YOU'RE WRONG!

Clarion Partners paid $158M for Tableau Software's NorthEdge HQ, a 209K SF, Class-A office building in Lake Union. NorthEdge is on the site of King County Metro's former bus stop maintenance shop. Clarion has been buying a significant number of properties in the Puget Sound region.

The purchase hints at a warming office market. Office vacancies dropped to 7.5% in Q3, compared to 7.7% in the previous quarter, according to Colliers.

5

Which Seattle submarket is drawing increased interest from investors for its office supply?

Northgate
Kent Valley
Bellevue CBD
Tacoma CBD

YOU'RE CORRECT!

As companies and investors are increasingly priced out of the Downtown office market, Seattle’s once-sleepy suburbs have transformed into bustling business districts. Bellevue in particular has become a major tech hub. Amazon, Salesforce, Microsoft, T-Mobile, HTC, Expedia, Concur, Paccar, Boeing and Symetra all have offices in the city. A caveat of Bellevue’s growth has been a lack of space, according to a recent JLL report. In Bellevue's central business district, there are few large blocks of office space.

More office projects have started to break ground and will alleviate the lack of supply. Vulcan Real Estate revealed plans last year for an 800K SF office development adjacent to the Bellevue Transit Center, according to Colliers.

YOU'RE WRONG!

As companies and investors are increasingly priced out of the Downtown office market, Seattle’s once-sleepy suburbs have transformed into bustling business districts. Bellevue in particular has become a major tech hub. Amazon, Salesforce, Microsoft, T-Mobile, HTC, Expedia, Concur, Paccar, Boeing and Symetra all have offices in the city. A caveat of Bellevue’s growth has been a lack of space, according to a recent JLL report. In Bellevue's central business district, there are few large blocks of office space.

More office projects have started to break ground and will alleviate the lack of supply. Vulcan Real Estate revealed plans last year for an 800K SF office development adjacent to the Bellevue Transit Center, according to Colliers.

6

What was the Seattle industrial vacancy rate in Q3?

2%
4.2%
5.8%
6%

YOU'RE CORRECT!

Industrial is a hot market nationwide, and Seattle is no exception. In Kent Valley, the vacancy rate was 4.2% in Q3, an increase of 0.04% year over year. The overall average asking rent was a reported $7.45/SF, a $0.84/SF increase from Q3 2016, according to Cushman & Wakefield.

“Industrial has been an extremely hot product in Seattle, and vacancies are at all-time lows,” Diggs said. “Absorption has been positive and the influence of e-commerce is also having a big impact.”

YOU'RE WRONG!

Industrial is a hot market nationwide, and Seattle is no exception. In Kent Valley, the vacancy rate was 4.2% in Q3, an increase of 0.04% year over year. The overall average asking rent was a reported $7.45/SF, a $0.84/SF increase from Q3 2016, according to Cushman & Wakefield.

“Industrial has been an extremely hot product in Seattle, and vacancies are at all-time lows,” Diggs said. “Absorption has been positive and the influence of e-commerce is also having a big impact.”

7

Which was a notable industrial transaction in 2017?

Bridge Point Burien
Chinook Building
Prologis Park Puyallup
Southcenter South

YOU'RE CORRECT!

The largest 2017 investment sale transaction in Seattle was in the SeaTac submarket. Bentall Kennedy purchased the 241K SF Bridge Point Burien building for $57.5M from Bridge Development Partners. Developed as a cold-storage facility by Bridge Development Partners in 2016, the warehouse will help meet the growing need for food storage and processing facilities as online grocery delivery and wholesalers take up existing resources.

YOU'RE WRONG!

The largest 2017 investment sale transaction in Seattle was in the SeaTac submarket. Bentall Kennedy purchased the 241K SF Bridge Point Burien building for $57.5M from Bridge Development Partners. Developed as a cold-storage facility by Bridge Development Partners in 2016, the warehouse will help meet the growing need for food storage and processing facilities as online grocery delivery and wholesalers take up existing resources.

8

How much did JPMorgan Chase invest in technology firmwide in 2016?

$2M
More than $1.5B
$3B
More than $9.5B

YOU'RE CORRECT!

Across all asset classes, investors have turned to the JPMorgan Chase Commercial Term Lending team for certainty, speed of execution and a team of local experts. JPMorgan Chase has also invested more than $9.5B in technology to improve its loan origination process.

"We have released a new system internally that will help us be more efficient with our ability to provide loans to clients, and we are doing a pilot right now with e-signatures and DocuSign," Bley said. "Our focus on tech advancement not only makes it easier for us to originate loans but also makes it easier for our clients."

To learn more about this Bisnow content partner, click here.

YOU'RE WRONG!

Across all asset classes, investors have turned to the JPMorgan Chase Commercial Term Lending team for certainty, speed of execution and a team of local experts. JPMorgan Chase has also invested more than $9.5B in technology to improve its loan origination process.

"We have released a new system internally that will help us be more efficient with our ability to provide loans to clients, and we are doing a pilot right now with e-signatures and DocuSign," Bley said. "Our focus on tech advancement not only makes it easier for us to originate loans but also makes it easier for our clients."

To learn more about this Bisnow content partner, click here.

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