Late last year when ULI published their Emerging Trends 2008, both Seattle and Portland were singled out as markets likely to withstand the storms brewing over other West Coast metros. Those predictions are now looking clairvoyant as Seattle is garnering increasing attention for the strength of its markets. A Wall Street Journal Article published this week cites Seattle’s office, retail and apartment rent growth as holding strong. Indeed, this conclusion is borne out by a Real Estate Flux prediction market forecasting the national multifamily market with the greatest rent growth in Q3 2008; Seattle is the 33.52% favorite. Of course, the WSJ piece is careful to cite risks in the Seattle marketplace, not the least of which includes Starbuck’s cutbacks and newly conservative growth strategy.
A participant in Emerging Trends 2008 identified Portland as “a miniature Seattle”, and Portland is also performing well considering broader macroeconomic influences. Globe St. reported earlier this week on the recapitalization of the US Bancorp Tower in Portland. A JP Morgan lead investor sold out of the property while a LaSalle fund acquired the lion’s share of its position. What is notable about the transaction is that the asset basically held its 2006 valuation while in many markets the asset would have lost significant value from any 2006 valuation - further proof of the relative stability of Portland.
Globe St. | Brian K. Miller | September 9, 2008
US Bancorp Tower includes the nameplate 750,000-sf, 43-story high-rise and the adjoining 260,000-sf low-rise office and retail center. The Energy Star property is 96% leased and on track to gain certification early next year from the US Green Building Council. The anchor tenant is Minneapolis-based US Bancorp, which leases 473,000 sf. The lease runs through 2015; about 70,000 sf of the bank’s leasehold is subleased to third parties.
The Wall Street Journal | Maura Webber Sadovi | September 10, 2008
“I wouldn’t say it’s recession-proof, but Seattle’s going to weather the recession a lot better than most markets,” said Stephanie Hession, a real-estate economist with PPR. Still, even with Seattle’s rents largely in positive territory, Ms. Hession says inflation will leave most landlords losing ground.
September 15th, 2008 at 8:19 pm
Starbucks may be more recession sensitive than people think. It is an obvious cut back point for strained consumers