Mortgage Banking

Making sense of commercial real estate finance.


Posted by Jordan Crouch on January 29, 2008

Last week, I attended the Leasing Forecast sponsored by our local NAIOP chapter. Here are the highlights with my thoughts at the end.

An industrial broker from Colliers spoke about six challenges for the future.

  1. Oil/Construction costs -rising
  2. New FEMA flood Plan – covering 100% of the Kent Valley
  3. Puget Sound Traffic – the area’s main detractor
  4. Credit Markets – making deals difficult
  5. Land Costs – rising
  6. Green Movement-more of a trend than a challenge, but something worth being aware of

Next was an office broker from CBRE specializing in the Seattle CBD. He mentioned there are many tenants expanding: Microsoft, Amazon, Starbucks, Safeco, and Nordstrom to name a few. Rental rates are up and vacancy is down. He had a positive outlook on the Seattle Office Market.

Last was a Bellevue office broker from GVA Kidder Mathews. He listed three main 2007 events to note:

  1. E.O.P. sale,
  2. Several large tenants leasing large chunks of space,
  3. There is 2.5M square feet of new development in Bellevue and most of it is preleased.

The two most interesting facts he shared was that Microsoft owns or leases 25% of the Eastside office market and for every new Microsoft job, 3.4 other jobs are created.

My Thoughts

On the Industrial broker’s 6 challenges:

  1. Agree, this will continue to be a problem.
  2. The Kent Valley is the main industrial hub of the Puget Sound. The repercussions of FEMA’s new plan haven’t been felt yet.
  3. Traffic here is ridiculous.
  4. This will be the biggest challenge for 2008.
  5. Land is so scarce developers are going almost 100 miles out to get raw industrial land.
  6. This will continue to be more “mainstream”

On the Seattle office broker’s comments: there is definitely a lot of expansions/new development. Last time I counted there were 13 cranes in the Seattle CBD. As for the Bellevue Office Broker, he’s right on. Microsoft, Yahoo, Expedia, Eddie Bauer all have taken HUGE chunks of space in the CBD. The EOP sale was a major 2007 event. The new construction is changing the face of Bellevue.


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