Seattle CRE Market Drops from #1 to #8
Seattle fell seven spots in the Urban Land Institute’s annual rankings of the top commercial real estate markets in the U.S. While still in the top 10 markets nationwide for 2010, Seattle was dethroned from its top ranking by Washington, D.C. Here are the key points from ULI’s “Emerging Trends in Real Estate:”
The bad:
- The only market that fell further in the rankings was Tucson, AZ
- Market fundamentals deteriorated rapidly and unexpectedly from last year
- Retail and office properties will be the hardest hit in 2010
The good:
- Seattle remains a top-10 market due to the region’s development barriers and connection to global commerce
- Seattle’s “buy” rating for apartments is the fourth highest
- When the economy rebounds, Seattle will recover faster than most markets
The drop is not unanticipated, as Seattle’s market generally lags the rest of the country by 12 months. The good news for apartment investors is that the majority of the downturn is attributed to office and retail properties. Although the apartment rental market has seen its share of vacancy growth, property values are slowly returning to their historical trendline. While the market recorrects, it is a great time to buy and/or sell and reset your basis prior to the next bull market. ULI clearly recognizes this opportunity, as evidenced by the high buy rating for Seattle apartments.
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