Commercial Real Estate Report Seattle – Q3 2023
Seattle Commercial Real Estate Market Q3
Is the commercial real estate market slowing down or is it picking up
Seattle commercial real estate covers several different sectors, including but not limited to retail, office, and multi-family. We will look at those three sectors to determine the status of the Seattle commercial real estate market during the third quarter of 2023.
Seattle Office Buildings
While the commercial sector in Seattle dropped drastically as a whole during the third quarter, office sales were the most affected. The decline was steep, and this sector only saw 10% of total sales, down 36% from before the pandemic. Nevertheless, notable sales still occurred. For example, The Barnes Building at 2320 1st Avenue in Belltown was sold by an estate for $193.85 per square foot, or $3.2 million. The buyer was Florida based Almalfi Investments. The four story, 16,508 square foot building was constructed in 1889 and renovated in 1985.
The four story Kobe Park Building that sits on .36 acres at 633 Yesler Way in Pioneer Square sold in July. The building was sold by ABC Legal Service Inc to Eric Hayashi for $9.7 million, or approximately $310 per square foot. Built in 1909 and renovated in 2011, the 31,432 square foot building was 100% leased at the time of sale. Capitol Hill also saw the sale of an office building in July. Purchased by Dodecahedron Enterprises LLC from Whitman Garden Apartments LLC, the building sold for $1.46 million, or $477.05 per square foot. The Class C building, located at 300 19th Avenue, was built in 1921.
Seattle Retail Market
Smaller retailers have struggled due to the loss of foot traffic Downtown. An increase in workers returning to office 2-3 days a week at companies such as Amazon and Meta has helped encourage sales. The upcoming holiday season is expected to provide a boost as well. A two property portfolio at Magnolia Village sold to Henbart LLC in mid-July for a total of $8.05 million. Home of Bartell’s Drugs, 2222 32nd Avenue W is made up of 11,799 square feet. It sold for $4.9 million. The other property, formerly a Supercuts at 2236 32nd Queen Anne Avenue W, is 6,875 square feet. Both were built in 1991 and have a combined 48 parking spaces.
A 7,280 square foot retail space sold for $$824.18, or $6 million, in August. The property was built in 1910 and is located at 523-525 Queen Anne Avenue N in the Queen Anne submarket. The seller, Seth Simpson, sold to Donald and Mary Jurgensen. The buyer and seller are both local. Locally based non profit Friends of Little Saigon bought a 22,162 square foot free standing retail building at 1001 S Jackson Street in South Seattle. The price was $288.78 per square foot for a total of $6.4 million. The one story building sits on .39 acres.
Industrial Market
Industrial real estate sat at a 6.1% vacancy rate at the end of September. Many landlords are opting to demise spaces rather than holding out for larger, single tenants. Nevertheless, a few notable sales occurred. A manufacturing building at 2752 6th Avenue S purchased from Steven J Cecchinelli by American Life, Inc in August. The purchase price was $4.5 million, selling for $195.89 per square foot.
Thea Sand sold a 6,000 square foot warehouse on .23 acres at 231 S Hinds in SoDo to Amiga Light in August. Built in 1964, the 6,000 square foot building was fully leased at the time of sale. It sold for $2.02 million, which breaks down to $335.83 per square foot. Another warehouse at 1101 Airport Way near the waterfront was purchased by Urban Visions from Performance Radiator Inc. Sold for $6.6 million, the four story Class C building was constructed in 1953 and has 12 parking spaces. The price breaks down to $320.39 per square foot and the property was fully leased at the time of sale.
Multi-Family Sales and Development
Multifamily saw the greatest increase compared to before the pandemic. Regardless, sales still declined 57% this quarter. However, the market is expected to trend upward by the end of the fourth quarter into the new year. The end of September saw the sale of a 6 story, 45 unit apartment building named SOLIS at 1300 E Pike Street in Capitol Hill. The cost was approximately $633,333 per unit, with a total purchase price of $25.5 million. Canada based Mondivan Properties Corporation bought the 50,000 square foot building from Solterra Capital.
Benjamin Maritz purchased The New Pacific Apartments in Belltown for $5.4 million, or $128,571 per unit. The 42 unit building was built in 1903 and was sold by Stein Skattum. The property was on the market for a little over a year and was 100% occupied at the time of sale. In Queen Anne, a 117,600 square foot apartment building with 166 units sold for $59.9 million during the third quarter. Equity Residential sold the property, built in 1992, to California company ColRich. It sold for $360,855 per unit. The building is 9 stories and has studio, one bedroom, and two bedroom apartments available. Formerly called Harrison Square Apartments, the name has been changed to Novi at Queen Anne.
Does the Future Look Brighter for the Seattle Job Market?
According to the Washington State Economic and Review Forecast, the economy expanded more than previously predicted. The unemployment rate has remained steady at 3.6% since July. Home prices in the Seattle area stopped declining, and four consecutive months saw an increase, though construction slowed. The average personal income in Washington was up 6.5%. It had previously been predicted to expand 4.8%. Price pressures are predicted to diminish for the rest of this year, and inflation in Seattle should average 3.1% in 2024.
Where Can I Find a Seattle Commercial Real Estate Broker?
There are many Seattle real estate companies, but Ewing & Clark has been providing our city with real estate service since 1900. Feel free to reach out to Ewing and Clark or one of our Seattle real estate agents that knows the Seattle commercial real estate market. If you prefer, start today on our Greater Seattle commercial MLS search and let us know what you want to see.
