Seattle's Industrial, Retail Outlook Robust. Here's Why.
When's the boom going to end in Seattle? Not this year, real estate experts say —which they've been saying for some years now, and have always been right. That's why we're excited to present the Seattle 2016 Forecast on Feb. 24 at the Grand Hyatt Seattle.
Sometimes overlooked, but nearly as hot as office or multifamily, is Seattle's industrial market. Panattoni Development partner Bart Brynestad, one of our speakers, says there isn't much risk in 2016 of overdevelopment of industrial product in greater Seattle, considering vacancy at a low 4%, over 5M SF of net absorption in 2015, and strong rental rate growth. "There's also a built-in land constraint component in Seattle, where there's very little well-located and properly zoned industrial parcels."
Though land is tight, the market still offers industrial development opportunities. In January, Panattoni—NAIOP’s 2015 Industrial Developer of the Year for the Puget Sound—inked a deal with the Port of Everett to buy nearly 10 acres at the Port’s 38-acre Riverside Business Park on the Snohomish River. Panattoni plans to develop 205k SF of light industrial on the site. The company is eager to expand its presence in Snohomish County, says Bart.
Harsch Investment Properties SVP retail north Lisa LaManna (snapped here with new banana-phone technology), who will also be a speaker, tells us the Seattle area is a thriving region that draws investors globally for its retail properties. "Investors see this area as a primary market area," she says, and are especially active in acquiring neighborhood centers, which have the strongest demand and greatest diversity among investors. REITs, pension funds and other institutions are all narrowly focused on neighborhood centers.
By comparison, community centers, lifestyle centers and power centers are also attractive, but investors tend to measure the omnichannel retailing experience (e-commerce) and its impact on the center being evaluated for purchase. "Typically, these centers are trading more directly between private investor groups with fewer institutional investors," Lisa says.