Construction in downtown Seattle is booming.
At least one construction project has broken ground each week, on average, since the start of 2016. The Downtown Seattle Association’s Mid-year Development Guide estimates there are more buildings under construction in this metro’s downtown area now than at any time in the past 11 years.
“With a strong and growing economy, a large anchor office tenant and a portfolio of companies that is both diversifying and expanding, demand for space remains high,” states the Guide, which is based on research generated by the Metropolitan Improvement District’s Business Development & Market Research team. “Downtown Seattle development is poised to continue delivering new inventory in a number of sectors at a solid pace.”
According to the website Sperling’s Best Places, Seattle’s unemployment rate is 4%, and the metro is expected to increase its jobs by 41.3% over the next 10 years (compared to 36.1% for the U.S. as a whole).
The Association’s President and CEO, Jon Scholes, attributes this construction boom, in part, to decisions by major employers to locate in the heart of the city. “This continued progress is a result of public and private collaboration focused on the core fundamentals of successful urban places including protecting the retail core, supporting arts and culture and investing in transit and multi-family housing. This development activity is supporting construction and related jobs, increasing density and walkability, and producing more housing stock.”
Sixty-five buildings are under construction in downtown Seattle, nearly all of which are scheduled for delivery next year, which would be more than in any prior year since the Association started tracking this metric. The $3.5 billion that’s currently invested in downtown development is more than two times the $1.6 billion that were invested five years ago.
This recent construction activity is helping to resuscitate construction employment in Seattle, which in the first quarter of 2016 rose to around 96,000, according to the Washington Employment Security Department.
The multifamily construction sector in this market’s downtown is particularly strong. Downtown has added more than 12,000 units since 2010, and set a record with 3,600 deliveries in 2015 alone. However, the vacancy rate for 50-unit and larger properties in King and Snohomish counties (Seattle and its suburbs) stands at 3.86% (excluding new construction), a new low for the region, according to Apartment Insights Washington, which tracks real estate activity in the state.
The Downtown Seattle Association estimates there are now 43 residential buildings under construction, and 708 units having been completed so far this year. The downtown area is on track to complete another 8,661 units by the end of 2017. There are also more than 20,000 residential apartments scheduled for completion after 2017 (although most of these are currently in pre-construction phase).
In 2015, 2.7 million sf of office space were delivered. And there are 14 million sf of office space in the development pipeline, or more than had been developed in this metro’s downtown aggregately in the last 11 years. Within the past 18 months, more than 3 million sf of new office space were completed, and 6 million sf are under construction. Amazon’s expansion in the South Lake Union and Denny Triangle neighborhoods accounts for more than 2 million sf of office space that’s under construction. Ultimately, Amazon may occupy more than 12 million sf of downtown office space in Seattle.
Fourteen million sf of office space are in the development pipeline in downtown Seattle, more than had been developed there aggregately in the past 11 years. Image: Downtown Seattle Association
Other office construction projects of note include Madison Centre (746,000 sf), The Mark (538,000 sf), and Midtown 21 (365,000 sf). “With companies such as Facebook, F5 and Amazon expanding their presence, and new to Downtown companies like Expedia, Google and Weyerhaeuser adding their workforces to the mix, demand is poised to continue to be robust,” the Association states.
The hotel sector is another example of how Downtown Seattle has flipped the switch. It already has 14,000 hotel rooms, but from 2011 through the first half of 2016, fewer than 700 rooms were added. Now, there are 1,471 rooms scheduled for completion in 2017, and another 1,468 in 2018.
Prominent projects include R.C. Hedreen’s 8th and Howell, a 1,260-room convention hotel that is currently in the demolition, shoring, and excavation phase.
To view an interactive development and construction projects map, click here.
Related Stories
Multifamily Housing | Mar 4, 2024
Single-family rentals continue to grow in BTR communities
Single-family rentals are continuing to grow in built-to-rent communities. Both rent and occupancy growth have been strong in recent months while remaining a financially viable option for renters.
MFPRO+ News | Mar 2, 2024
Job gains boost Yardi Matrix National Rent Forecast for 2024
Multifamily asking rents broke the five-month streak of sequential average declines in January, rising 0.07 percent, shows a new special report from Yardi Matrix.
K-12 Schools | Feb 29, 2024
Average age of U.S. school buildings is just under 50 years
The average age of a main instructional school building in the United States is 49 years, according to a survey by the National Center for Education Statistics (NCES). About 38% of schools were built before 1970. Roughly half of the schools surveyed have undergone a major building renovation or addition.
MFPRO+ Research | Feb 27, 2024
Most competitive rental markets of early 2024
The U.S. rental market in early 2024 is moderately competitive, with apartments taking an average of 41 days to find tenants, according to the latest RentCafe Market Competitivity Report.
Construction Costs | Feb 22, 2024
K-12 school construction costs for 2024
Data from Gordian breaks down the average cost per square foot for four different types of K-12 school buildings (elementary schools, junior high schools, high schools, and vocational schools) across 10 U.S. cities.
Student Housing | Feb 21, 2024
Student housing preleasing continues to grow at record pace
Student housing preleasing continues to be robust even as rent growth has decelerated, according to the latest Yardi Matrix National Student Housing Report.
Architects | Feb 21, 2024
Architecture Billings Index remains in 'declining billings' state in January 2024
Architecture firm billings remained soft entering into 2024, with an AIA/Deltek Architecture Billings Index (ABI) score of 46.2 in January. Any score below 50.0 indicates decreasing business conditions.
Multifamily Housing | Feb 14, 2024
Multifamily rent remains flat at $1,710 in January
The multifamily market was stable at the start of 2024, despite the pressure of a supply boom in some markets, according to the latest Yardi Matrix National Multifamily Report.
Student Housing | Feb 13, 2024
Student housing market expected to improve in 2024
The past year has brought tough times for student housing investment sales due to unfavorable debt markets. However, 2024 offers a brighter outlook if debt conditions improve as predicted.
Contractors | Feb 13, 2024
The average U.S. contractor has 8.4 months worth of construction work in the pipeline, as of January 2024
Associated Builders and Contractors reported today that its Construction Backlog Indicator declined to 8.4 months in January, according to an ABC member survey conducted from Jan. 22 to Feb. 4. The reading is down 0.6 months from January 2023.