When you think of Seattle, you likely have a vivid image in your mind. As the largest city in the Pacific Northwest, nestled among lush evergreen forests and the waterways of Puget Sound, Seattle is known for its coffee, music, politics, and innovative businesses.
Home to Amazon, Microsoft, and many other tech companies, Seattle continues to be a top market for technology job growth. Google recently started construction on a massive campus which will add about 600,000 square feet of office space to Seattle as well as thousands of new technology jobs. Facebook is also in the middle of an expansion.Its new Seattle office is could add another 2,000 jobs to the city over the next few years.
Why Invest in Seattle Apartments?
Along with its strong economy, Seattle is seeing impressive population growth, which is fueling the multifamily market throughout Seattle. Seattle received more than 20,000 new inhabitants between July 2015 and July 2016, and the Seattle-Tacoma-Bellevue area is ranked seventh on Forbes’ Fastest Growing Cities list.
In addition to the influx of newcomers attracted by a prospering job market, skyrocketing prices for single-family dwellings are also adding to the demand for multifamily housing in Seattle and the surrounding areas. As a result, vacancy rates have remained low and the Seattle housing market remains undersupplied.
The boom in Seattle construction and development also points to a strong Seattle real estate market for investors. The city of Seattle issued almost 12,000 building permits in the first 10 months of its fiscal year generating a record $2.5 billion in projects. Many of these new projects are multifamily housing sites, as the city expects 11,660 new units to come onto the market in 2017. In 2018, the city is projected to see at least 14,293 apartments built.
Development Opportunities in Seattle Multifamily Market
The multifamily housing stock in Seattle is strongly skewed toward the luxury segment. This is one of the reasons that Seattle had the country’s fourth highest rise in average rents year-on-year as of September 2017.
In response to the increasing rent costs, the city government instituted the Mandatory Housing Affordability (MHA) policy, which it expects to lead to the creation of 6,000 affordable housing units in the next 10 years. Under MHA, developers are rewarded for setting aside 7 to 11% of a building’s area for affordable housing by being allowed to build higher than the limit set by zoning laws. If they decline this offer, they are fined proportionally to the area of the building in question and that money goes to the city’s affordable housing fund.
The policy is being applied selectively and implemented gradually, as new zoning ordinances are put in place. Existing buildings and construction projects that are already underway are not affected. It will be years before the full effects of MHA can be seen, but it will have an impact on multifamily development and investment strategy going forward.
Investing in Multifamily Real Estate in Seattle
With so much growth, change, and opportunity affecting Seattle, it is helpful to work with an investment management firm with expertise in the Seattle area.
At CWS Capital Partners, we have a wealth of experience investing in the Seattle real estate market. Whether you’re looking to acquire an existing investment property, reposition or develop a property, or conduct a 1031 exchange, we can be your partner throughout the process. To learn more about our Seattle properties, please visit our affiliated CWS Apartment Homes website or contact us today.
The information provided here is for your general informational purposes only. It should not be considered a recommendation or personalized advisory advice. CWS has made this third party information available from authors it believes are knowledgeable and reliable resources. However, its accuracy or completeness cannot be guaranteed and sentiment may change due to legal or economic conditions.
All investments involve risk including the possible loss of principal. You should familiarize yourself with all risks associated with any investment product before investing.
Advisory services are provided by CWS Capital Partners LLC, a registered investment advisor.
Securities offered by CWS Capital Partners LLC are through an affiliated entity, CWS Investments. CWS Investments is a registered Broker Dealer, member FINRA, SIPC.