IRR-Seattle Mid-Year Viewpoint 2015 Local Market Report - Retail
After years of strong employment growth and resultant in-migration of highly paid tech workers, the Seattle market (including Bellevue and Redmond), is enjoying robust gains in retail sales volumes with taxable retail sales up 5% in 2014. The retail cores in both the Seattle and Bellevue CBDs have seen very low vacancy rates for a number of years with high barriers to entry and strong interest from potential tenants. Shopping demand is growing due to increased population, affluence, tourism, and employment trends that are expected to continue.
Retail development activity is modest. Most new retail space in Seattle is occurring in mixed-use projects, such as ground floor spaces at new residential developments. Suburban areas have seen continued development of new neighborhood and community shopping centers.
Major upcoming projects include the redevelopment of Totem Lake Mall in Kirkland which will include 540,000 SF of retail space. In downtown Bellevue, the Lincoln Square expansion (across from Bellevue Square) includes a three level 172,000 square foot retail component. In downtown Seattle, Skansa USA Commercial Development has entered into a ground lease with the Samis Foundation for three quarters of the city block bounded by First and Second avenues and Seneca and University streets (within two blocks of the Pike Place Market). The Skansa project could include up to 30,000 square feet of retail as part of a mixed-use office retail proposal. Transaction activity in the first half of 2015 included an 81,560 square foot neighborhood center anchored by Whole Foods which sold in April for almost $600 per square foot. Institutional quality investment properties command capitalization rates in the 5.5% to 6.25% range, depending upon age and tenancy. With limited new supply coming on-line in the next several years, the outlook for the retail market remains very positive.
Download the full version PDF of this Local Market Report below. It includes graphs and tables.
IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.