What Makes Seattle Sizzle
The next big thing for Seattle is Seattle itself--it's on the rise as a world-class city and a magnet for capital from all over the world. (Portland is so jealous.) Both intellectual and investment capital, that is, both necessary for long-term growth. That was the takeaway from Bisnow's Seattle Next Big Thing event this week.
Cairncross & Hempelmann partner John Hempelmann moderated the panel at the Four Seasons Seattle in front of 300 attendees, kicking things off with a couple of remarkable statistics about the Seattle area. According to the latest numbers from the Census Bureau, between 1990 and 2012, the number of adults in the city who have a BA or higher jumped from 49% to 56%--a number no other major US city can match. (Bring on all comers for a trivia contest.) John also highlighted the importance of TOD in Seattle by citing an estimate that at least 60% of real estate growth in the coming years is going to have a transit-oriented component.
Holland Development COO Tom Parsons, whose company is building over 1,000 units on Dexter Ave (among many other projects), says the next big thing for Seattle is going to be a critical mass of intellectual capital in the Gen Y cohort--something that's formed only in a few other places. Some of the brightest young people in the world are coming to Seattle because the likes of Microsoft and Amazon, and behind them are companies coming to the area to hire away that intellectual capital. Smart people follow smart people. (Maybe we need to reexamine how we rate the intelligence of lemmings.) It's a dynamic that's going to keep producing high-quality jobs in the region.
Pine Street Group managing partner Matt Griffin agrees that the Puget Sound has tremendous intellectual capital, not just in the tech companies, but also the universities. The next big thing among many younger workers, he says, is their realization that owning a house isn't always a great investment, and the idea that ownership might keep them from relocating for that next great job. That's going to continue to add fuel to the apartment market. Matt also stresses that new apartment developments aren't just for Gen Y. Older workers want many of the same things as they leave their larger homes to less stressful apartment living.
Metzler CEO Don Wise notes that all the ingredients are in place for another Seattle neighborhood to undergo an epic transformation, just as South Lake Union has. Seattle's an engine of cutting-edge job creation, domestic and global investors are attracted to the region, and a number of well-located areas are candidates for a transformation. Don says he doesn't know which neighborhood will reinvent itself in the coming years, but possibilities include the University District, the International District, and the Port of Seattle, which might do something amazing with the land that it controls. "Many of the people making these transformations happen are sitting in this room," he says.
Essex Property Trust first VP Bryan Meyer says tomorrow's apartment development is going to produce a new generation of buildings. Units are getting smaller and walkable locations more important. Another rising demographic that's part of Seattle's job growth--one that developers need to consider--includes workers from other countries. "They're looking for walkability, but also a sense of community within the building, as well as in the greater neighborhood (which is what Gen Y focuses on). Bryan adds that Gen Y isn't a permanent renter class (Gen Y isn't a permanent anything), but plans to rent longer than their elders did, and that's going to drive more development, especially in close-in neighborhoods on the East Side.
Wright Runstad prez Greg Johnson, who's in the thick of the 5.3M SF Spring District project in Bellevue and other projects in Seattle, says the office development has undergone a major change in recent years. Not too long ago, the goal was to impress members of the C-suite and their clients. Now, the goal is to develop properties that enable companies to attract and retain the talent they need. These days that talent wants to be able to walk to everything. That's at the root of downtown growth, and that's going to remain a big thing in Seattle.