By Gavin Curtis

In the energy sector, the call is Drill, Baby, Drill! For Seattle’s commercial real estate (CRE) developers, the line is Build, Baby, Build!

Looking skyward on a walk Downtown through South Lake Union and Capitol Hill, a plethora of crane construction activity is apparent. According to industry expert, Rider Levett Bucknall, their latest Crane Index released in 2018 places Greater Seattle as the number one metro in the U.S. for crane construction with 65 in operation.

The next closest? Chicago with 40 units, and West Coast giants Los Angeles and San Francisco combine for 62. For three consecutive years, the Emerald City has held the top post, and these extraordinary numbers cement Seattle’s dominance as one of the most vibrant and economically robust regions.

Seattle’s unemployment rate fell to 3.6 percent by November of 2018, and since 2010, the metro is the fastest growing large city in the country.

Business expansion and population growth is creating demand for space in Office, Multi-Family and Industrial. Market deliveries remain robust and there is no shortage of pipeline activity.

• Industrial: 5,124,702 square feet
• Office: 8,381,352 square feet
• Multi-Family: 2,793 units

Already in the New Year, a visionary five building S-Campus project near Century Link field is taking shape consisting of 1.2 million square feet of premium office space.

The boom in CRE of course involves the Fortune 500 names one would expect: Amazon, Microsoft, Google, Facebook and Apple. However, to presume that the titans are the only players would miss the story of the mid-size firms, which are absorbing space at a feverish rate and paying all-time high rents.

Average asking rent for office properties is now roughly 25 percent higher than last cycle’s peak.

Developers are bringing assets to market and finding tenants eager to pre-lease even before construction is complete. An excellent example: in the combined submarkets of Belltown/Denny Regrade, Pioneer Square/Waterfront and Seattle Commercial Business District (CBD), more than 3 million square feet is under construction and expected to deliver by 2020. Only 20 percent of the total space remained available as of the close of 2018.

With so much demand, and supply entering at a torrid pace to quench the appetite, tenants might be concerned that their next lease may be far more expensive than they bargained for.

Not to worry.

Our team at Hughes Marino is dedicated to always finding great value for our clients. There are property options across the metro, which are priced under market value, that offer exceptional amenities and are situated in prime locales.

Without question this current economic cycle is in its late stages, yet with Seattle’s industry diversity and strong fundamentals, the opportunities for further expansion remain very positive.

In North America, only Toronto has more active cranes (97) than Seattle. In the coming years that gap may narrow as Puget Sound developers continue to create remarkable projects across all CRE sectors. Build, Baby, Build!