Life Sciences Mania in South Lake Union
South Lake Union has a good problem. There are more scientists and researchers who want to be in the neighborhood than places to put them, according to the speakers at Bisnow's Future of South Lake Union event yesterday. (It's next to impossible to win bar trivia nights.)
It’s a good problem to have, but it’s still a problem, and one that might be difficult to resolve, our speakers explained to the crowd of 325 at the Grand Hyatt Seattle, because life sciences space development is a capital-intensive business, and there’s also a limited supply of potential sites as development of other kinds of properties intensifies. Other issues addressed by the panel included affordable housing, and more importantly some of the (misguided) proposals to deal with it, and transit infrastructure.
BioMed Realty senior director Mike Ruhl, whose company has about 450k SF of biomed property in SLU, and is working on 120k SF more, which will likely be full by the time it’s finished. The demand for life sciences space grows every year, according to the panel, while the supply isn’t keeping up. Life science research firms want to be in SLU, where it’s easier to network, and where there’s a certain openness to collaboration. For some of the scientists doing work in the neighborhood, it’s popular because they can live there as well, and walk to work. That means that there’s room in the market for spec life sciences space.
Holland Partner Group CEO Clyde Holland. The panel said that SLU is more than just a life-science hub. There’s about 10M SF of office space in close proximity to SLU, which will be able to handle many of creative-class jobs that are coming to the area—Amazon’s addition of jobs was only the beginning. If it hasn’t happened already, the neighborhood’s going to have a critical mass of such jobs in the near future, and there will be tech entrepreneurs willing to finance new tech innovation by companies started or moving to SLU. The cycle will feed on itself, attracting even more creative-class companies and workers and the companies they spawn.
Here, Vulcan Real Estate VP Ada Healy, whose company has about 1M SF under construction, and 3.5M SF in pre-development in the area. The walkability of SLU is going to remain attractive for younger employees, the panel noted, and that’s going to continue to drive demand for residential development. The first major wave of residential delivery is happening now, and for the first time, the market is seeing concessions, but that won’t last. Given the number of people coming to SLU, that situation will right itself, and given the long-term prospects for job growth in the neighborhood, high demand for residential property is going characterize the area for years to come.
Here, Northeastern University-Seattle CEO Tayloe Washburn. Though South Lake Union actually has a fair number of affordable housing units, the need for more is one of the hottest of the hot-button issues in the city, according to the panelists. Everyone agreed that proposed linkage fees to pay for affordable housing would be counterproductive. Multifamily tax exemptions have had much more successful history of encouraging affordable housing elsewhere--it’s the carrot rather than the stick--and should be pursued. Microunits are affordable, but there’s starting to be a pushback on that.
Via Architecture director Matt Roewe, who’s also a member of the Seattle Planning Commission. There might have to be teardowns in SLU soon to facilitate further development, especially residential, the panelists explained—but those kinds of property will be a lot more expensive to develop, so it might not happen until rents increase further. The best thing to happen to Uptown is South Lake Union, the panelists also noted, and the prosperity of SLU is going to migrate westward, with more residential and commercial development in that direction.
Foster Pepper attorney Joe Delaney, who moderated. Other challenges for the neighborhood include improving transit to and from the area, as well as within, noted the panelists. SLU might not face a shortage of parking spots if future transit systems are sophisticated enough to handle the volume. Also, the new Denny Substation urgently needs to be completed to accommodate the growing power demands of a growing life science hub.