Seattle Rents: High, But Not Highest In Washington State

It’s not a news flash that the real estate scene in Seattle has exploded in recent years. The Emerald City has gone from a town most people outside the state only associated with coffee and flannel, to the tech capital of the US (save for our friends in Silicon Valley). As home to some of the biggest tech names in the world and a booming job market to match, it’s fair to say there’s might not be enough housing to meet demand. Or, at least to meet demand AND your budget.

High rises, apartment buildings and condos are going up all over the city, and soon, our beloved skyline will be dotted with more and more buildings and towers, making the Seattle of just 10 years-ago look almost unfamiliar.

Seattle has recently made headlines as one of the most expensive places to live, get this, in the world. That’s right, recent data has placed Seattle’s rent rates at 5th highest in the nation and, supposedly 9th highest in the world! However, San Francisco and New York still dwarf us, tying for number one most expensive, world-wide.

Those of us who are Seattle Natives know that the average rental rate in Seattle has increased fairly dramatically in the last few years, but it’s interesting to note that, while Seattle’s rents have been on the rise, they don’t quite top the list of highest rents in the state.

According to recent data from Apartment List, Seattle ranks at number 5 in the state for highest rents, with the average monthly rent for a one-bedroom apartment at about $1,650.

Surprisingly, Mercer Island tops the list of cities in Washington for highest rents. A one-bedroom on Mercer Island goes for an average of a whopping $1,890 per month. No one said Island living was cheap, I suppose.

Filling in the gaps between number 1 and number 5 on the list are Bellevue at number 2 with an average of $1,860 per month for a one-bedroom (not a whole lot lower than their neighboring Island), Redmond at number 3 with an average of about $1,690 monthly rent for a one bedroom and Kirkland at number 4 with an average monthly rent of $1,660 for a one-bedroom.

Seattle and the Eastside are not the only places in Washington with rising rent rates. Tacoma tops the list nation-wide for fastest growing rent with a year-over-year growth rate of 7.7 percent. Seattle comes close, but not close enough to that figure with year-over-year rental rate growth at 5.3 percent.

Staggering growth aside, Tacoma is still a bargain in the rental market compared to Seattle, with a one-bedroom in Tacoma going for an average of $1,000 per month. For those of you keeping score, that’s a savings of $650 compared to Seattle.

But, proving that some things really don’t change, the cheapest places to live in the Evergreen State are still East of the Cascade Mountains. You can get a one-bedroom for only $600 per month in Walla Walla and it’s not much pricier in the State’s second largest city, Spokane, at around $630 per month.

What a difference a mountain range makes…

Amazon’s SLU Sale Is the Largest in the US for 2012

The mammoth $1.16 Billion Amazon sale of their South Lake Union headquarter went through last week, and was officially dubbed the largest commercial office sale of 2012, according to the Puget Sound Business Journal. The stats are tracked by New York research firm Real Capital Analytics, and the Amazon transaction was recently ranked as the 27th largest commercial office sale in US history. According to the Puget Sound Business Journal, Amazon had plenty of incentive to close the deal prior to the new year; Amazon made a $51 million deposit that the company would forfeit if the transaction did not close this quarter. amazon

The sale certainly blows other substantial commercial transactions out of the park, with the next largest deal estimated at $868.6 million being a 1.2 million-square-foot building in San Francisco. The question still hangs in the air as to where all of the Amazonians will live around SLU once the expansion is full installed? Is there enough condos and rentals available in the neighborhood, or will it become overbuilt with highrises in upcoming years?

Is Seattle’s Amazon Tower On the Market?

West 8th Building

There are two buildings in Denny Triangle that are gaining alot of hype in commercial real estate news recently; the 7th & Madison building, and West 8th, (which is currently occupied by Amazon) may be up for sale, according to the Commercial Broker’s Association. According to the Puget Sound Business Journal, West 8th developer Touchstone Corp has declined to comment on whether the 28 story building is for sale or not, and contacts at HAL Real Estate Investments that owns the 7th & Madison building did not respond were no available for comment either.

This has all been brought to the attention of the media as the time-frame is closing for sellers to close on properties before the capital gains tax rate goes up at the end of this year, (which could potentially increase 15-20%). Could both companies possibly be selling to take advantage of the lower tax rate? For more information on commercial properties in  the Seattle area, visit the Puget Sound Journal.

Mercer Street Clean Up: Two Way Traffic Up and Running Monday

As far back as I can remember, the Mercer Street corridor cluster has always been one of the prime spots to get stuck in traffic in Seattle, and one of the worst if you need to be anywhere on time. But all that might change, now that Mercer will finally experience 6 lanes of two way traffic beginning on Monday.

That’s right, for the first time since 1968 drivers leaving I-5 will be able to go straight towards Seattle Center instead of wrapping around in the stop and go traffic along Valley Street. Eastbound I-5 traffic isn’t looking promising to improve congestion, but  according to the Seattle Times, westbound drivers leaving I-5 could save a few minutes in their commute. Although lanes will start to open next week, there is still a lot of work to be done, and construction will continue along Fairview Ave N, making it tricky to get on I-5 after work hours. Traffic police will be assisting drivers navigate side streets during this time to aid the congestion, and two crosswalks will close to make it easier to right turn on Mercer and gain access to I-5. For more information on the construction process, visit the SDOT.

Plaza 600 in South Lake Union Sells for $54.9 Million

Joshua Green Corp partnered with the Urban Renaissance Group to purchase the Plaza 600 in the Central District for $54.9 million. The  20-story office tower was bought from private investor Vance Corp this week, and sold for roughly $262 per square foot. This property is currently 85% leased, and because there is significant short term rollover, the new owner will now have the opportunity to take advantage of the the potential rent growth Seattle has continued to experience. According to the CoStar Group, “noting a shortage of value-add opportunities in major CBD’s in the Western US, Shannon said this was perfect timing for the buyer given the accelerating rents in the market.” At the time of sale, almost 70% of the leases were below market value, and scheduled to roll over within the next four years. For more information on Plaza 600, the Puget Sound Business Journal.

Construction Scheduled for Mercer Street Next Week

This week the Seattle Department of Transportation issued a statement indicating that there will be nighttime lane closures for the East end of the Mercer project beginning next week. Drivers can expect delays starting Monday evening, and here is the scoop on whats happening:

One Northbound turn lane  onto Fairview Ave N will shut down at 8PM Monday April 20th, and Crews will work through the night until 6:00am Tuesday morning. The closure will give construction crews the opportunity to install an underground pipe across Valley Street at Boren Ave N.

On May 2-3 closures will happen between 9th Ave N and Westlake Ave N, ad westbound Broad st will be closed at night again, between 8:00pm-6:00am. Commuters traveling West on Valley street will be detoured North on Westlake to 8th Ave N then South on 9th Ave N to reconnect with Southbound Broad St. Be prepared for delays next week, and please find the full construction report here.