A great article in today’s Seattle Times by Eric Pryne gives a nice review of 2009 in commercial real estate around Seattle.
In 2007, developers excavated a deep hole in downtown Seattle at Second Avenue and Pine Street for the foundation of a 23-story luxury hotel and condo tower.
They filled the hole in 2009.
That pretty much captures the kind of year it’s been for commercial real estate in the Seattle area.
The development pipeline dried up. A few projects were halted midconstruction.
Office and industrial vacancy rates soared. Rents fell. Condo developers, desperate for sales, resorted to auctions and big price cuts to unload units. Banks foreclosed on some properties.
And 2010 won’t be any better, according to year-end forecasts by developers, brokers and other industry insiders.
“2010 in my world is going to be rough,” Bart Brynestad, who heads the Seattle office of industrial developer Panattoni Development, told one recent industry gathering.
“I think we have just seen the tip of the iceberg on what’s coming,” said Tom Parsons, senior vice president of developer Opus Northwest.
The tip was sobering enough. During 2009 developers delivered 2.4 million square feet of new office buildings in greater downtown Seattle — the equivalent of more than 1 ½ Columbia Centers. At last count, more than 90 percent of it remained unleased.
The attached graphic (pdf) shows that office vacancy rates have gone from around 8% in 2006 and 2007 to nearly 20% in 2009.
Looks like it’s a great time to rent office space in Seattle.
(Eric Pryne, Seattle Times, 2009.12.27)