Washington

Seattle Metro Multifamily Market — It’s a Supply Thing

by Jeff Shaw November 18, 2022

By Brian O’Connor, Executive Director, Valuation & Advisory, Cushman & Wakefield The Seattle Metro apartment market has been surprisingly resilient. The market quickly bounced back from the COVID downturn at a robust clip and has continued moving at a healthy pace. During the first six months of 2022, metro Seattle absorbed more than 12,600 units. That already surpasses a typical full year of demand by several thousand units. From January 2022 through June, the market absorbed 3,779 newly constructed units — a respectable level. If you also factor in the decline in existing units, then the market absorbed another 8,886 units. That tells us that the supply of new units was too low…or demand was much stronger than we expected. The market had rebounded to a metro-wide vacancy rate of only 1.33 percent at mid-year 2022, an astoundingly low level. From year-end 2021 to June 2022, overall apartment vacancies declined from 3 percent to 1.33 percent. We do, however, expect vacancies to begin increasing slightly. These rates typically see an uptick as we head into winter. Rent growth also slows during this time. We expect to see the metro-wide vacancy rate start to rise just a bit by year-end 2022, to …

November 18, 2022

Market Reports Retail Washington Western Western Market Reports

Seattle’s Retail Sector Proves Resilient

by Jeff Shaw November 8, 2022

By Dino A. Christophilis, Senior Vice President, CBRE; Daniel Tibeau, Associate, CBRE; and Parker Ksidakis, Associate, CBRE Few sectors were as disrupted by the pandemic as retail. While 2020 proved to be a tumultuous year, the last year and a half have demonstrated the resiliency of retail — both in Seattle and nationally. The Seattle economy is performing well for a recovering retail sector, with continued employment growth and increasing retail spending. The Puget Sound is notorious for its lack of new retail development, and the recent years have been no exception. The environment of increasing demand with a flat level of supply results in positive conditions for existing retail space. Like much of the nation, concerns persist in Seattle around inflation, increasing debt costs and a potential slowing in the global economy. However, the situation in Seattle is more positive and nuanced. Growing Investment Activity Year to date, Seattle is poised to outperform the prior year in terms of total investment dollars. The second quarter of 2022 experienced 65 percent greater investment volume relative to the same quarter in 2021. This figure is particularly notable as 2021 was an exceptional year. Investors deployed pent-up capital that was held during the height of the pandemic. Total retail …

November 8, 2022

Acquisitions Industrial Washington Western

BKM Capital Acquires Pacific Industrial Park in Marysville, Washington for $20.3M

by Amy Works October 31, 2022

MARYSVILLE, WASH. — BKM Capital Partners has expanded its Puget Sound portfolio with the purchase of Pacific Industrial Park in Marysville. Pacific Industrial Park LP I sold the asset for $20.3 million. Constructed between 1998 and 2000, the 122,000-square-foot light industrial park features four Class A buildings, which are currently 100 percent leased across 11 units that range in size from 5,060 square feet to 28,206 square feet. Tenants include Snohomish County Sheriff, Greenpointe Technologies and Dish Networks. The assets are located at 14800-15100 40th Ave. NE. BKM’s in-house property and construction teams will execute an improvement program at the property to create a standardized tenant experience. Upgrades and improvements will address parking lots, ESG projects, interior buildouts, roofs, drought-tolerant landscaping, HVAC, lighting, signage and a wrought iron security fence surrounding the sheriff’s office space. Matthew Hagen and Matthew Henn of Kidder Mathews represented the seller, while Fletcher Farrar of Neil Walter Co. represented the buyer in the deal.

October 31, 2022

Market Reports Office Washington Western Western Market Reports

Seattle’s Office Market Shows Improvement

by Jeff Shaw October 28, 2022

By Charlie Farra, Senior Managing Director, Newmark The Puget Sound office market has fared better than many peer metro areas during the pandemic. While the market remains tenuous in the region, local office fundamentals have improved to date in 2022. A consistent through the chaos is a flight to quality. If employers expect a return to office, they are being tasked with creating a physical environment that is far more favorable than a home office or local coffee shop. We are referring to this as “commute-worthy real estate.” Energy, collaboration, amenities, views, natural light and safety are some of the main points of focus and, due to current economic conditions, the ability to find such space at discounted pricing is within reason. New office leases are trending toward 75 percent of their pre-pandemic footprint as companies consider how and where to operate their businesses going forward. Professional service companies currently account for the most demand and are in the office more frequently than the technology sector. In tech cities like Seattle, this is a seismic shift from the previous decade, which saw skylines transform from the expansions of Amazon, Microsoft, Meta and Google. Many companies returning to the office are utilizing a hybrid …

October 28, 2022

Development Loans Multifamily Washington Western

PCCP Provides $13.2M Equity Investment for Multifamily Development in Sumner, Washington

by Amy Works October 27, 2022

SUMNER, WASH. — PCCP has provided a $13.2 million preferred equity investment to Timberland Partners to finance the construction of Sumner Apartments, a garden-style multifamily community in Sumner. Construction of the project commenced in May, with completion slated for third-quarter 2024. Situated on 5.7 acres at 16017 60th St., Sumner Apartments will offer 162 studio, one- and two-bedroom apartments spread across nine three-story residential buildings. Unit interiors will feature vinyl flooring, triple-pane windows, stainless steel appliances, walk-in closets, quartz countertops, full-size washers/dryers and private patios and balconies. Community amenities will include a clubhouse and amenity center, pool, covered barbecues, dog park, picnic area, electric car charging stations and bike parking. Jake Leibsohn of Northmarq’s Seattle regional office arranged the preferred equity investment between PCCP and Timberlane Partners and sourced the project’s $35.5 million senior construction loan through a regional bank.

October 27, 2022

Acquisitions Multifamily Seniors Housing Washington Western

Oxford Capital, Fortress Investment Acquire Three Seniors Housing Communities in Sequim, Washington

by Amy Works October 26, 2022

SEQUIM, WASH. — A joint venture between Oxford Capital Group LLC and Fortress Investment Group LLC has acquired a three-property, 256-unit seniors housing portfolio in Sequim. The properties are located northwest of Seattle, just across the Salish Sea from Victoria, British Columbia. The buyer acquired the properties from an independent family operator. Oxford’s seniors housing management affiliate, Oxford Living US LLC, will manage the properties. Terms of the transaction were not disclosed. “We are excited to continue to expand our seniors housing silo as we strategically assemble a portfolio of properties throughout the United States and Canada,” says John Rutledge, founder, chairman and CEO of Oxford Capital Group. “Oxford Living has made targeted seniors housing acquisitions and investments in a number of growing markets throughout the southeastern United States and Canada, including Florida and Ontario. We plan further portfolio acquisitions in these and other markets.” “This transaction builds further on our strategy of acquiring seniors housing assets with scale in attractive demographic areas that are well positioned to weather an inflationary environment,” adds Peter Stone, managing director at Fortress. “While most institutional investors focus on high-end development in urban centers, our strategy is to buy overlooked mid-market properties which are …

October 26, 2022

Acquisitions Multifamily Washington Western

CBRE Negotiates $104M Sale of Multifamily Property in Seattle’s South Lake Union

by Amy Works October 25, 2022

SEATTLE — CBRE has arranged the sale of 624 Yale, an apartment community in Seattle’s South Lake Union neighborhood. An undisclosed buyer acquired the asset for $104 million. Jon Hallgrimson, Eli Hanacek, Mark Washington and Kyle Yamamoto of CBRE’s Pacific Northwest multifamily team represented the undisclosed seller in the deal. Built in 2018, the nine-story building features 206 studio, one- and two-bedroom floor plans with an average unit size of 711 square feet. Community also includes fitness, work and meeting amenities. Additionally, the property has a hidden speakeasy and two rooftop terraces with panoramic views of the Seattle skyline and Lake Union.

October 25, 2022

Industrial Market Reports Washington Western Western Market Reports

Tenant Demand Remains High in Seattle Industrial Market, but Interest Rates Slow Investment Sales

by Jeff Shaw October 25, 2022

By Bill Condon, Executive Vice President, Colliers The most significant impact to Seattle’s industrial market this year comes from outside the market. Inflation resulting in raised interest rates has stymied sale activity but done little to slow leasing activity. Tenant demand has remained high, particularly among third-party logistics (3PL), ecommerce and aerospace companies. Logistics remains the main driver for activity and development in submarkets from Tacoma south. This year alone, Holman Distribution leased 353,000 square feet in Frederickson and Maersk leased 246,000 square feet in Lakewood. Both of these cities only had sporadic activity prior to 2020. For 3PL companies, the south Puget Sound/Tacoma area is attractive due to its proximity to the Port of Tacoma and the desirable labor pool in Pierce County. Closer to Seattle, Blue Origin leased 172,000 square feet in Kent, furthering the legacy of aerospace activity in Puget Sound. The rapid rise in interest rates has created a difference in expectations between sellers and buyers, whose interest rates have nearly doubled since the start of this year. This disconnect between the seller’s value and buyer’s ability to purchase is likely to delay transactions until there’s more stability in capital markets nationally. While tenant demand remains robust, there …

October 25, 2022

Acquisitions Industrial Washington Western

MCA Realty Sells 136,350 SF Lakewood Business Park in Washington

by Amy Works October 21, 2022

LAKEWOOD, WASH. — Orange County, Calif.-based MCA Realty has completed the disposition of Lakewood Business Park, a multi-tenant industrial park located at 10107 S. Tacoma Way in Lakewood, approximately 40 miles southwest of Seattle. A private 1031 exchange buyer acquired the asset for $32.9 million. Built in 1978/1981, the park features six buildings offering a total of 136,350 square feet of industrial space. The property is less than eight miles from the Port of Tacoma, and less than two miles from Lewis-McChord joint army and air force base. At the time of sale, the asset was 100 percent occupied. MCA Realty originally acquired the park in December 2020 for $18.2 million and implemented updates to the property, including new paint, asphalt, curbing, lighting repairs and landscaping. Brett Hartzell, Paige Morgan and Rebecca Perlmutter of CBRE, along with Nick Ratzk and John DeHan of Neil Walter, represented seller. Gary Stache, Anthony DeLorenzo and Bill Maher of CBRE represented the buyer in the deal.

October 21, 2022

Green-Acres-Distribution-Center-Spokane-Valley-WA

Development Industrial Washington Western

PCCP, Panattoni Break Ground on 192,078 SF Green Acres Distribution Center in Spokane Valley, Washington

by Amy Works October 19, 2022

SPOKANE VALLEY, WASH. — A joint venture between PCCP and Panattoni Development Co. has started construction of Green Acres Distribution Center, a speculative, Class A distribution facility at 17770 E. Euclid Ave. in Spokane Valley. Slated for completion in third-quarter 2023, the 192,078-square-foot building will offer 30-foot clear heights and rear loading capabilities. The asset is situated on 9.8 acres. The Spokane Valley area offer an abundant labor pool and access to Interstate 90, as well as Union Pacific and Burlington Northern Santa Fe railroad lines.

October 19, 2022

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