[DJC]

[Commercial Marketplace]
March 12, 1998

The commercial real estate market in the Seattle area continues to thrive. Developers and investors from across the nation are noticing that there are few markets in the country that can compare with Seattle's booming economy and low vacancy rates. In the DJC's 1998 Commercial Marketplace publication, readers will find a variety of stories looking into the reasons for the area's success.

Lincoln Square
Lincoln Square is one of many new mid-range developments in the area.

In John Bliss' story, "Has the downtown real estate market reached its peak?", he looks at some of the numbers that have drawn the eyes of national investors and developers. Among the more impressive of these is the recent sale of the US Bank Centre, which was purchased for $260 per square foot, the hightest price on the West Coast except for San Francisco's Embarcadero Center.

But with all this activity, there are some concerns. Higher prices for real estate means it's more difficult to get a project financed, as Michael Allmon points out in his story. Finding the right site, or any site at all, has become a real challenge. One area that seems to be prime for development is the Denny Regrade, which DJC reporter Jon Savelle explores in his story, "Developers set their sights on Denny Triangle."

The Eastside market is enjoying similar development. Paul Sweeney looks at the ambitious plans developers have to nearly double the commercial space in the Bellevue area in his story "Developers play high-stakes poker on the Eastside."

The DJC has also conducted its annual survey of commercial real estate firms to get a first-hand look at how the past year has been, what today's market offers, and what rea estate industry experts think next year will hold.

We hope the stories we've assembled will provide readers with a consumate look at the local commercial real estate market.


1998 Real Estate Survey
20 firms participated in our survey this year. Here's what they said.
Seattle real estate is climbing the charts
If the commercial real estate market across the United States is red-hot, then color Seattle and its surrounding commercial sub-markets as white. As in white-hot. Blazing. Number four or five on the national hit parade, and climbing.
Is new round of condo conversions headed our way?
It's not lurking, it's right around the corner and gaining momentum. Developers are taking it slow and careful, but it's on the verge of explosion.
Transit success? It's the real estate, stupid
The overwhelming majority of U.S. transit systems, particularly newly installed West Coast systems, are big financial losers. Why is this the case, when systems in other countries often enjoy high ridership and even earn profits? The answer is that they are linked to real estate development.
Seattle area hotel developers continue with aggressive plans
If you were in the hotel business in 1997 and didn't make money, you might want to consider finding a different line of work. This seems to be the overwhelming opinion, both locally and nationally, of those in the industry.
1988 vs. 1998: it's not deja vu all over again
As they did a decade ago, real estate developers, building owners and many of the vendors to these real estate principals are all asking themselves the same question: Are we profitable and successful because we are smart or because we are incredibly good-looking?
Downtown Seattle retail: one size doesn't fit all
In our view, just building new stores and restaurants does not make a "successful" downtown. In fact, there is so much capital available to build indisciminately that "success" might be trampled to death.
Developers have big plans for Seattle CBD
Everyone is talking about how great the office market is -- for landlords.
Technology, teams changing office needs
Should you be worried about the impacts of telecommuting on companies whose primary market is the design of office space?
Capital sources are forever changing real estate industry
By the time the millennium clock turns in the year 2000, globalization of the economy brought on by the "Technological Revolution" will forever change the way we live, play and work. For the commercial real estate industry, it means that what used to be the lifeblood of our industry -- local relationships, local knowledge and local banking -- will be of little or no advantage.
Developers play high-stakes poker on the Eastside
With 3.7 million square feet planned in a downtown Bellevue office market that is currently only 4 million square feet, the first question people will ask is: Have developers gone crazy?
Retail will become Seattle's strong suit
After Frederick & Nelson closed its Seattle store for good in 1992, most real estate experts seriously questioned the notion that downtown Seattle's real estate market would be transformed into a 24-hour entertainment/retail mecca by the end of the century.
Has the downtown real estate market reached its peak?
The downtown Seattle and Bellevue office markets are consistently touted as two of the most attractive investment markets nationwide. The proof is easy to spot.
It's test time for state's growth management effort
In 1990, the state Growth Management Act (GMA) was passed with much fanfare. The act was spawned during a decade when regional growth was being blamed for regional sprawl. The GMA promised to end sprawl as we know it and provide a framework for more orderly growth in the future. Now it is "test time" for GMA.
REITs busy buying up Seattle apartments
Real Estate Investment Trusts, or REITs, have made quite a mark on the Puget Sound apartment market. They are the most active buyers and developers of apartments in the region today.
Developers set their sights on Denny Triangle
Mention the Denny Triangle and a lot of people say, "What's that?" But the almost-forgotten Seattle neighborhood just north of downtown may soon become better known as development marches its way.
How long will this apartment boom last?
In the Fall of 1996 in the Cain and Scott Report we stated that recent trends in sales and rentals indicated that apartment investments were in the early stages of a bull market. The recent apartment sales volume and run up of prices have borne this out.
Subleasing helps solve lab space shortage
How is the growing Seattle biotechnology community coping with the lack of laboratory space in the area? Everyone from start-up biotech companies to established research centers are looking for alternative solutions.

Copyright © 1998 Seattle Daily Journal of Commerce.