Post on 28-Jun-2020
transcript
SIMON | ANDERSON TEAM
2020 APARTMENT MARKET STUDY
Employment & Apartment Development Pipeline Analysis
Seattle & Puget Sound Region
TABLE OF CONTENTS01INTRODUCTION
Track Record .............................................................................................. 4
Our Development Land Sales Highlights .............................................. 4
Meet Our Team ......................................................................................... 5
02EMPLOYMENT & DEVELOPMENT OVERVIEW
Puget Sound Apartment Development Overview ................................ 8
Apartment Pipeline Snapshot ...............................................................10
Economic Fundamentals .......................................................................11
Future of the Office Market ....................................................................12
Strength of the Puget Sound Office Market ........................................13
Apartment Developer Survey ................................................................14
03KING COUNTY
Employment Overview ...........................................................................19
Urban King Development Overview ....................................................22
Suburban King Development Overview ..............................................38
04SNOHOMISH COUNTY
Employment Overview ...........................................................................47
Development Overview .........................................................................50
05PIERCE COUNTY
Employment Overview ...........................................................................57
Development Overview .........................................................................60
06KITSAP COUNTY
Employment Overview ...........................................................................67
Development Overview .........................................................................70
07DATA SOURCES & DEFINITIONS .............................................................76
Turning our calendars from 2019 to 2020 not only signified the beginning of a new year, but also a new decade — and the prospect of an entirely new market cycle.
Needless to say, it didn’t start out quite like any of us imagined.
While the current health crisis is unprecedented in modern times, we can anticipate that people’s reactions and market results will likely approximate those resulting from past major economic events.
In this issue of our 2020 Market Study, we analyze employment and income data as of year-end 2019, coupled with the current apartment development pipeline and existing inventory (10+ unit buildings) across King, Snohomish, Pierce, and Kitsap counties.
WHY EMPLOYMENT & DEVELOPMENT?
Analyzing income growth, job creation, and office development is fundamental to answering whether the Puget Sound can sustain growth of an additional 100,000+ apartment units. With simple calculations of pre-leased office space and the multiplier effect of new jobs created (direct and ancillary), we’re able to conclude that our region requires an additional 47,000 new apartment units simply to maintain equilibrium with job creation and in-migration in the next few years. We explore these numbers in more depth on page 12.
WHAT CAN WE EXPECT IN A TIME OF THE UNEXPECTED?
It may feel unhelpful or pointless to look at data rooted in the pre-COVID-19 era, and while there’s no denying that seemingly everything changed over the last three months, we’d beg to disagree. In fact, the best antidote to economic turmoil as we await a vaccine is to temper concern with patience and thoughtful study of the market.
I have vast belief in Seattle as one of the most economically resilient markets in the Unites States, if not the world. Whether it was the Great Depression, Oil Embargo, Savings & Loan Crisis, Tech Bubble Bust, or Great Recession, there is a light at the end of every tunnel. And I know of precious few apartment investors who wish they waited longer to wade back into the apartment investment market after nearly every financial downturn of the last 50 years.
Accordingly, keep your eye on the next 10 years, rather than the next 10 weeks or months, and please call us to discuss how we can best support you in this time of uncertainty. We are here through any market shift to help you achieve your apartment development and investment goals through our advisory, valuation, and brokerage services.
Let Us Turn Our Expertise into Your Profit!
MAY 2020
DYLAN SIMON
Executive Vice President
01 INTRODUCTION
$1.01BTOTAL VALUE SOLD &
UNDER CONTRACT
TRACK RECORD
7,468TOTAL UNITS SOLD &
UNDER CONTRACT
MULTIFAMILY INVESTMENT SALES SPECIALISTS
The multifamily investment team led by Dylan Simon and Jerrid Anderson of Kidder Mathews represents apartment investors and developers in the sale, purchase, and financing of apartment buildings and development land ranging from $1 million to more than $100 million in value across Seattle and the Puget Sound.
Our goal is to help you maximize your multifamily investments, whether that means selling your apartment building faster and for more money, or providing advisory services for assets you plan to hold or want to buy. And while anyone can promise you results, we deliver on our promises with a data-driven understanding of the market, an extensive buyer reach, and exceptional marketing that cuts through the noise.
1.01M SFDEVELOPMENT LAND SOLD
& UNDER CONTRACT
$133.4MACTIVE LISTINGS & LISTINGS
COMING TO MARKET
OUR DEVELOPMENT LAND SALE HIGHLIGHTS
BEL-RED TODBellevue, WA
Sale Price $12,300,000
Units 249
Parcel Size 61,426 SF
4035 STONE WAY NFremont, Seattle
Sale Price $5,140,000
Units 48
Parcel Size 13,600 SF
2912 BEACON AVE SNorth Beacon Hill, Seattle
Sale Price $4,000,000
Units 66
Parcel Size 16,080 SF
MARYMOOR TODRedmond, WA
Sale Price Sale Pending
Units 135
Parcel Size 93,449 SF
4 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
MEET OUR TEAM
Dylan is a market-leading broker serving Seattle and the Puget Sound region, specializing in the sale of apartment buildings and development land, with expertise in sales strategies, market knowledge, and industry trends.
Dylan SimonExecutive Vice President
Jerrid is an apartment broker specializing in micro apartment, urban apartment, and development land sales. He is passionate about marketing and video content.
Jerrid AndersonExecutive Vice President
Matt is an apartment broker specializing in 5-30 unit urban and suburban apartment sales, underwriting, valuations, and market research.
Matt LairdSenior Associate
Brandon is an apartment broker specializing in business development, market research, and off-market acquisitions, with an expertise in the Pierce County market.
Brandon LawlerAssociate
Winslow is an apartment broker specializing in sales of apartment buildings and development land across the Puget Sound, with expertise in the Snohomish County market.
Winslow LeeAssociate
Alex leads mortgage brokerage for the team, specializing in loan origination and financial underwriting.
Alex MundyDebt Finance
Tyler specializes in financial underwriting, apartment and development land valuations, market research, and data analysis.
Tyler BlaikieFinancial Analyst
Cate manages both team and property marketing, specializing in writing, branding, digital strategy, PR, and event planning.
Cate ChaseSenior Marketing Specialist
Michelle oversees all team processes, ensuring optimal efficiency and value creation with a strategic lens for listing activities.
Michelle YehVice President
I N T R O D U C T I O N
2020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS 5
6 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
72020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
02EMPLOYMENT &
DEVELOPMENT OVERVIEW
PUGET SOUND APARTMENT DEVELOPMENT OVERVIEW
APARTMENT PIPELINE SNAPSHOT
ECONOMIC FUNDAMENTALS
FUTURE OF THE OFFICE MARKET
STRENGTH OF THE PUGET SOUND OFFICE MARKET
APARTMENT DEVELOPER SURVEY
For this study, we traced apartment development deliveries back 10 years and analyzed three distinct phases of the current development pipeline, as outlined below. Our research and data cover the quad-county region (King, Snohomish, Pierce, and Kitsap counties), encompassing more than 6,400 square miles, 100,000+ planned apartment units, and nearly 1,000 individual apartment developments.
PIPELINE DEFINITIONS
UNDER CONSTRUCTION Developments labeled “Under Construction” have broken ground. Anticipated delivery is within the next 36 months for Type I projects or the next 24 months for Type III and Type V projects.
PLAN APPROVED These units have entitlements from their respective cities and could break ground at any time. Given current market dynamics, it is important to note projects that might be on hold. Concerns over the economy, rising construction costs, and tighter lending restrictions have led some developers to rethink permitted projects. Some permitted sites will trade hands and construction will commence, while many others will be held by developers until a later date.
IN REVIEW Projects “In Review” are currently pending city approvals. In Seattle, the entitlement process can take over two years, so in many cases, projects in this category are three or more years away from delivery.
PUGET SOUND APARTMENT DEVELOPMENT OVERVIEW
EMPLOYMENT & DEVELOPMENT OVERVIEW
10+ UNIT BUILDINGS
EXISTING INVENTORY
118,178UNITS
14%
2%
41%
EXISTING INVENTORY
40,520UNITS
5%9%
EXISTING INVENTORY
108,765UNITS
6%
13%
0.5%
EXISTING INVENTORY
59,358UNITS
1%2%
4%
EXISTING INVENTORY
9,510UNITS
19%
4%5%
SNOHOMISH
SUBURBAN KING
PIERCE
URBAN KINGKITSAP
Units under construction as a percentage of existing inventory
Units approved as a percentage of existing inventory
Units in review as a percentage of existing inventory
8 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
92020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
Total Units Delivered + Pipeline2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020 Construction Approved In Review
Urban King 1,916 769 2,637 4,692 6,959 6,991 5,884 6,625 6,957 5,460 1,652 16,392 2,439 48,426 117,799
Suburban King 1,721 772 823 688 2,081 2,255 2,635 2,237 3,453 3,082 546 6,769 533 14,545 42,140
Snohomish 591 108 352 619 924 1,213 60 441 48 1,073 - 2,186 - 3,495 11,110
Pierce 353 357 966 732 601 848 833 979 313 1,213 126 1,250 675 2,264 11,510
Kitsap - - - - 251 12 71 245 166 114 38 417 484 1,816 3,614
Subtotal 4,581 2,006 4,778 6,731 10,816 11,319 9,483 10,527 10,937 10,942 2,362 27,014 4,131 70,546
Total Delivered 84,482 Total Pipeline 101,691 186,173
PUGET SOUND DELIVERIES VERSUS INVENTORY*
2013 2014 2015 2016 2017 2018 2019 Q1 2020
Total Deliveries (Units) 6,731 10,816 11,319 9,483 10,527 10,937 10,942 2,362
Total Inventory (Units) 269,945 280,761 292,080 301,563 312,090 323,027 333,969 336,331
*KING, SNOHOMISH, PIERCE & KITSAP COUNTIES — 10+ UNIT BUILDINGS
DEVELOPMENT DELIVERIES & PIPELINE BY YEAR / STATUS
E M P L O Y M E N T & D E V E L O P M E N T O V E R V I E W
0
10,000
20,000
30,000
40,000
50,000
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10 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
Inventory as of Year-End 2009
Inventory Growth 2010 – 1Q20
Under Construction
Plan Approved
In Review
Urban King 67,636 Units 50,542 Units 16,392 Units 2,439 Units 48,426 Units
Suburban King 88,472 Units 20,293 Units 6,769 Units 533 Units 14,545 Units
Snohomish 35,091 Units 5,429 Units 2,186 Units 0 Units 3,495 Units
Pierce 52,037 Units 7,321 Units 1,250 Units 675 Units 2,264 Units
Kitsap 8,613 Units 897 Units 417 Units 484 Units 1,816 Units
A MONUMENTAL DECADE
Over the course of the last decade, apartment developers delivered more than 84,000 apartment units across the region. The previous apartment building boom spanned from the mid-1980s to the early 1990s and also contributed over 80,000 apartments to the region. The key difference is an undeniable shift towards urbanization during this market cycle, in which Urban King County was well on the way to doubling its total unit count in a 10-year period.
APARTMENT PIPELINE SNAPSHOT
Development History & Pipeline by Region
23%
75%
15%
14%
10%
14%
6%
5%
2%
4%
1.8%
0.5%
35%
13%
8%
17%
4%1.1%
4.9%
URBANIZATION STILL PREVAILS
In the last several years, more apartment developers looked for opportunities outside the core, urban neighborhoods of Seattle and Bellevue, discovering traditionally suburban locations supportive of urbanization to plan and deliver new apartment communities. The great majority of these developments are located in King County, yet Snohomish, Pierce, and Kitsap counties continue to offer developers some attractive alternative locations — especially where urban dynamics exist and/or public transportation options can be capitalized.
PREPARE FOR A SLOWDOWN
Even prior to COVID-19, the number of apartment buildings under construction or with approved permits began to slow. Municipalities were inundated with permit applications over the last several years, public processes are taking longer, and rising construction costs slowed starts, all contributing to a declining number of deliveries in years ahead.
Given that permitting offices are working remotely and there is concern over near-term market fundamentals, we expect a slowdown in the number of apartment deliveries once buildings currently under construction are completed. We believe this is healthy for the market, providing time to absorb new inventory and prepare for a vibrant rebound ahead of us.
E M P L O Y M E N T & D E V E L O P M E N T O V E R V I E W
ECONOMIC FUNDAMENTALSINCOME GROWTH THAT LEADS THE NATION
As of the writing of this study, the world is at grips, battling the near-term impacts of COVID-19. It is far too early to quantify either short-term or long-term impacts on the Puget Sound economy, let alone that of the United States and the globe. Yet, the year-over-year data from 2018–2019 overwhelmingly supports a conclusion that the Puget Sound’s economy was growing at a
rate nearly double that of the nation in all key metrics, especially personal income growth (110% greater in Puget Sound!).
We will continue to follow the changing economic conditions through 2020 and into 2021; however, our early prognostication is that the backbone of the region’s economy is diversified, resilient, and well-prepared for an early recovery. Much like the region roared back from the Great Recession, we expect a similar revival this go-round.
Median Household Income: Puget Sound vs. the Nation
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
PUGET SOUND
THE NATION
Unemployment Rate 3.3% 3.5%
Employment Growth 2.5% 1.4%
Population Growth 1.7% 0.5%
Personal Income Growth
6.3% 3.0%
$90K
$70K
$50K
$30K
$22,595
$13,903PUGET SOUND
THE NATION
{{
YEAR-OVER-YEAR % INCREASE CALCULATED FROM 2018 - 2019
2020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS 11
E M P L O Y M E N T & D E V E L O P M E N T O V E R V I E W
Our Metrics
A commonplace metric for headcount provides for 150 square feet of space per employee, equating to pre-leased Class A office space for approximately 45,000 employees over the next two years. Given that each employee generates demand for more ancillary jobs and services, we apply a “multiplier effect” of 4 to 1, which equates to 190,000 additional jobs. In total, we estimate 235,000 new jobs will be created in the region based on preleasing rates for 2020 and 2021.
It is too soon to tell what the impact of COVID-19 will be on office leasing and occupancy dynamics. While a larger percentage of employees may work from home part-time, those in the office will likely require more personal space, expanding demand.
MASSIVE ABSORPTION OF OFFICE SPACE DEMONSTRATES CONTINUED APARTMENT DEMAND
Tech continued to expand in the Pacific Northwest throughout 2019 and into Q1 2020, absorbing 3.5 million square feet of office space. Amazon, Facebook, Expedia, and Google are among the most actively growing companies in the area.
With an additional ten million square feet of office space currently under construction across the region, there are some worries of oversupply. Yest, outsized demand on the Eastside led to an impressive preleasing figure of 97%, whereas 67% of space is currently preleased in Seattle.
This high demand met with limited supply tipped the scales, and Bellevue now leads the region in price per square foot for Class A office space.
FUTURE OF THE OFFICE MARKET
JOBS CREATED MULTIPLIER EFFECT JOBS ADDED
Seattle Office Absorption & Job Creation
2018 2019 Under Construction
81,109POSSIBLE JOBS
Square Feet
{7M
6M
5M
4M
3M
2M
1M
0
Jobs Added
180K
160K
140K
120K
100K
80K
60K
40K
20K
0
117,047POSSIBLE JOBS
196,580POSSIBLE JOBS
{{
2018 2019 Under Construction
Square Feet
4.0M
3.5M
3.0M
2.5M
2.0M
1.5M
1.0M
500K
0
Jobs Added
100K
80K
60K
40K
20K
0
17,627POSSIBLE JOBS
23,245POSSIBLE JOBS
130,187POSSIBLE JOBS
Eastside Office Absorption & Job Creation
{ {
{
OFFICE ABSORPTION (SF) OFFICE UNDER CONSTRUCTION (SF) OFFICE PRE-LEASED (SF)
12 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
E M P L O Y M E N T & D E V E L O P M E N T O V E R V I E W
132020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
STRENGTH OF THE PUGET SOUND OFFICE MARKET
EASTSIDE OFFICE RATES SURGE PAST SEATTLE
Just last year, Class A office rental rates in Bellevue trailed those in Seattle by approximately 10%. Today, Bellevue holds the title with rates surging 10% above Seattle’s. Overall, office rental rates in Seattle continued to grow just slightly year-over-year (2%), while Bellevue posted a 27% gain.
Although Class A office rental rates continue to grow, the Puget Sound office market still provides tenants a significant discount compared to other popular tech-driven markets, such as San Francisco and New York City. The region’s growing supply of tech talent, discounted office rates, and lack of state income tax will help keep the office market strong through the rocky start to 2020 and beyond.
$56.61
PRICE/SFEASTSIDE CLASS A OFFICE RENT
27%
Y-O-Y INCREASEEASTSIDE CLASS A OFFICE RENT
Class A Office Rent
$0
$20
$40
$60
$80
$100
$56.61$51.44
$91.70 $89.08
Eastside Seattle Manhattan San Francisco
Regional Office Absorption & Vacancy Rates
NEW DELIVERIES (SF) NET ABSORPTION (SF) VACANCY (%)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Square Feet
5M
4M
3M
2M
1M
0
-1M
-2M
-3M
16%
15%
14%
13%
12%
11%
10%
9%
8%
7%
6%
Vacancy
E M P L O Y M E N T & D E V E L O P M E N T O V E R V I E W
E M P L O Y M E N T & D E V E L O P M E N T O V E R V I E W
WHAT THE REGION'S ACTIVE APARTMENT DEVELOPERS HAVE TO SAY
In April 2020, we reached out to apartment developers across the region to get real-time feedback on how market dynamics may have shifted from the start of 2020 through the first quarter.
The survey results offer a glimpse into abruptly changed market conditions brought about by the COVID-19 pandemic, and their direct impacts on regional apartment development.
APARTMENT DEVELOPER SURVEY
1 2-3 4-5 More than 50%
10%
20%
30%
40%
50%
60%
70%
Less than 100 100 - 500 500 - 1,000 More than 1,0000%
10%
20%
30%
40%
50%
60%
70%
Under 5.50% 5.50% - 5.75% 5.75% - 6.00% Above 6.00%0%
10%
20%
30%
40%
50%
60%
70%
Under 5.50% 5.50% - 5.75% 5.75% - 6.00% Above 6.00%0%
10%
20%
30%
40%
50%
60%
70%
How many apartment developments are you currently working on (in permitting and/or under construction)?
How many apartment units do you currently have in permitting or under construction?
At the start of 2020, what was your average target return level for your development(s)?
As of April 2020, what is your average target return level to move forward with your development(s)?
14 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
Not at all Yes, by 1 - 25basis points
Yes, by 25 -50 basispoints
Yes, by morethan 50 basis
points
0%
10%
20%
30%
40%
50%
60%
70%
Continued withdue diligence
and plan to waivefeasibility
Continued withdue diligence
and waivedfeasibility
Continued withfeasibility, butextended thewaiver date
Terminated thecontract
0%
10%
20%
30%
40%
50%
60%
70%
No - keptconstruction
loan rates thesame
Yes - loweredconstructionloan rates by
less than .50%
Yes - raisedconstruction
loan rates 0.50%- 1.00%
Yes - raisedconstructionloan rates by
more than1.00%
0%
10%
20%
30%
40%
50%
60%
70%
No - kept equityrequirements the
same
Yes - reducedloan amounts by
less than 5%
Yes - reducedloan amounts by
5% - 10%
Yes - reducedloan amounts bymore than 10%
0%
10%
20%
30%
40%
50%
60%
70%
No, not at all Yes, by 1 - 90days
Yes, by 90 -180 days
Yes, by morethan 180 days
0%
10%
20%
30%
40%
50%
60%
70%
No, not at all Yes, by 1 - 90days
Yes, by 90 -180 days
Yes, by morethan 180 days
0%
10%
20%
30%
40%
50%
60%
70%
As of April 2020, have you changed what you predict will be stabilized capitalization rates at project completion?
For any development land acquisitions you had under contract as of March 2020, have you:
Between March and April 2020, have you experienced lenders changing rates on new loans?
Between March and April 2020, have you experienced lenders reducing loan-to-cost requirements?
Based on slowdowns within permitting offices beginning in March 2020, do you expect your permits to be delayed?
Based on slowdowns at construction sites beginning in March 2020, do you expect your date of completion to be delayed?
2020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS 15
E M P L O Y M E N T & D E V E L O P M E N T O V E R V I E W
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172020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
03KING
COUNTYEMPLOYMENT OVERVIEW
URBAN KING DEVELOPMENT OVERVIEW
SUBURBAN KING DEVELOPMENT OVERVIEW
ROBUST DEVELOPMENT PIPELINE EXPANDS BEYOND THE CORE
After nearly doubling apartment inventory over the last decade, interest among developers in Urban King isn’t waning, but is certainly shifting. Investors are focused on locations with new potential due to upzoning and existing or planned light rail stations. In well-developed areas that remain in high demand, such as Ballard, development trends are also shifting from traditional unit mixes to an efficiency focus. Microhousing comprises nearly 10% of Urban King’s current development pipeline, representing 5,000+ new units that are both affordable for residents and offer developers the highest rent per square foot of all unit types.
EASTSIDE STORY
Over the last decade, Eastside markets took a backseat to the star that is Seattle — until now. Mirroring the success of pre-leasing among office developments and growing Class A office rents, West Bellevue’s apartment pipeline now boasts the largest single development of all Urban King and a pipeline that equates to 63% of total inventory. And while Microsoft remains a consistent anchor for Eastside employment, a business-friendly atmosphere and expanding light rail line continue to draw the likes of Facebook, Amazon, and other big tech companies. Expect that East King’s pipeline of 3,300 units under construction will experience strong absorption during lease-up.
KING COUNTY
226,943TOTAL INVENTORY
89,104TOTAL PIPELINE
18 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
EMPLOYMENT OVERVIEW
A SECOND ACT, HALTED
The King County economy roared into 2019, with job growth outpacing that of both 2017 and 2018. Economists were rightly skeptical of continued regional economic growth based on a flat-to-downward trend in the previous several years signaling that the expansion cycle dating back to 2012 may soon come to an end.
Yet, employers seemingly were just waiting on the delivery of new office towers so they could fill them with employees waiting at the doors. As a result, in 2019 King County unemployment reached the lowest levels ever recorded, while personal income growth accelerated past the already brisk pace established in 2018 (5.6%), to a rate in 2019 nearly double that of the nation (5.9%).
Given the acceleration of these same underlying economic fundamentals during the latter half of 2019, no one predicted the abatement of growth in 2020, much less the binary, light-switch “shutdown” of all economies globally. A halting of growth is putting it mildly, and only time will indicate what to expect in 2020–2021. Our bet is that these economic fundamentals may lie dormant for a brief period, but they are far from extinguished. Expect King County to lead the nation, and the world, in a recovery from the impacts of COVID-19.
KING COUNTY
THE NATION
Unemployment Rate 2.7% 3.5%
Employment Growth 3.0% 1.4%
Population Growth 1.5% 0.5%
Personal Income Growth
5.9% 3.0%
Total Employment1.3M
1.2M
1.1M
1M
900K
800K
700K
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
YEAR-OVER-YEAR % INCREASE CALCULATED FROM 2018 - 2019
NO. OF PERSONS EMPLOYED
2020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS 19
K I N G C O U N T Y
Top Employers | Open Job Postings by Year
SOURCES: EMPLOYMENT SECURITY DEPARTMENT/LMEA; THE CONFERENCE BOARD, HELP WANTED ONLINE JOB ANNOUNCEMENTS
2019 JOB POSTINGS
The Boeing Company
Nordstrom
King County
Providence Health & Services
Kaiser Permanente
Fred Hutchinson Cancer Research Center
Swedish Health Service
Microsoft Corporation
University of Washington
Amazon
2018 JOB POSTINGS
T-Mobile
Amazon Web Services
Seattle Children's Hospital
Kaiser Permanente
PeaceHealth
Microsoft Corporation
Providence Health & Services
University of Washington
Amazon.com Services
Amazon
0 2,000 4,000 6,000 8,000 10,000 12,000
0 2,000 4,000 6,000 8,000 10,000
EMPLOYERS LEADING THE WAY
It isn’t surprising to see the technology and biosciences industries again topping the 2019 most active employer list for King County. What is surprising is the significantly lower number of job postings compared to 2018: the top 10 employers posted approximately 4,300 fewer jobs. Given that 2019 still experienced an overall increase in employment, the reduced number of postings could be due to a stronger rate of hiring year-over-year as these companies filled critical roles.
20 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
K I N G C O U N T Y
212020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
INCOME & INDUSTRY
From 2010 to 2018, median household income in King County increased nearly $29,000 (43%). During this period, King County’s rate of income growth more than doubled that of the national average. It’s no surprise that the region’s economic expansion post the Great Recession is the envy of the nation!
Median income in King County approaching $100,000 per year is an impressive feat, as it captures growth beyond just the much-lauded technology sector. For the region, the rising tide of employment and income growth lifted all boats; although, it is clear from the data that growth in the technology, information systems, and professional sectors remained strongest.
Median Household Income: King County vs. the Nation
SOURCE: FRED
{{
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
$100K
$90K
$80K
$70K
$60K
$50K
$40K
$30K
$28,675
$13,903
KING COUNTY
THE NATION
County Employment Composition by Industry
19.0%TRADE, TRANSPORTATION, & UTILITIES
13.0%HEALTHCARE & EDUCATION
10.0%LEISURE &HOSPITALITY
12.0%GOVERNMENT
6.0%CONSTRUCTION
5.0%FINANCIAL ACTIVITIES
3.0%AEROSPACE
8.0%INFORMATION
10.0%OTHER MANUFACTURING
9.0%TECH & SCIENCE 5.0%
OTHER
SOURCE: EMPLOYMENT SECURITY DEPARTMENT
Total Employment Y-O-Y INCREASE Y-O-Y DECREASE NO CHANGE Y-O-Y
K I N G C O U N T Y
22 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
URBAN KING DEVELOPMENT OVERVIEWLast year marked the end of a decade and a remarkable market cycle of apartment inventory growth in Urban King. The horizon of development in these neighborhoods is no less impressive, with a pipeline of apartment projects capable of matching — and even slightly surpassing — the number of units added over the last 10 years.
While year-over-year the number of projects under construction remains nearly unchanged, far fewer projects are permitted and ready to break ground, indicating that the pipeline of deliveries is set to slow in the next two years.
The locations and composition of apartment projects planned in Urban King continue to metamorphosize. Neighborhoods east of Lake Washington are experiencing more development activity, and across all markets unit sizes are progressively shrinking.
Ballard
Fremont
Wallingford
Green Lake Roosevelt
University District
Magnolia
Queen Anne Capitol
Hill
Central District
WestSeattle
SouthSeattle
MercerIsland
West Bellevue
Kirkland
South Lake UnionEastlake, Westlake
First Hill, Yesler Terrace
Belltown, Downtown, Pioneer Square,
NORTH KING
EAST KING
SOUTH KING
Urban King Development Pipeline
TOTAL INVENTORY: 118,178 UNITS
UNDER CONSTRUCTION: 16,392 UNITS | 14% OF TOTAL INVENTORY
PLANS APPROVED: 2,439 UNITS | 2% OF TOTAL INVENTORY
IN REVIEW: 48,426 UNITS | 41% OF TOTAL INVENTORY
K I N G C O U N T Y
232020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
INVENTORY AS OF YEAR-END 2009 INVENTORY GROWTH: 2010 - 1Q2020 UNDER CONSTRUCTION
Ballard 2,191 Units 3,471 Units 248 Units
Fremont, Green Lake & Wallingford
4,156 Units 2,635 Units 181 Units
University District & Roosevelt
6,259 Units 3,618 Units 914 Units
Queen Anne & Magnolia 7,203 Units 3,147 Units 702 Units
South Lake Union, Westlake & Eastlake
4,146 Units 7,802 Units 1,781 Units
Belltown, Downtown & Pioneer Square
7,437 Units 7,974 Units 3,873 Units
First Hill & Yesler Terrace 3,923 Units 2,951 Units 2,023 Units
Capitol Hill 11,099 Units 6,358 Units 1,084 Units
Central District 1,873 Units 961 Units 1,164 Units
West Seattle 4,403 Units 3,471 Units 249 Units
South Seattle 2,428 Units 2,311 Units 1,287 Units
West Bellevue & Mercer Island
6,480 Units 4,197 Units 897 Units
Kirkland 6,038 Units 1,646 Units 1,989 Units
NOTE: PIPELINE ONLY INCLUDES # OF UNITS CURRENTLY UNDER CONSTRUCTION. PROJECTS THAT ARE “APPROVED” OR “IN REVIEW” ARE NOT INCLUDED IN THIS CHART. SOURCE (INVENTORY AS OF 2010, INVENTORY GROWTH 2010 – 1Q2020): COSTAR
Urban King Historical Deliveries & Construction Pipeline by Neighborhood
3%
4% INCREASE OVER 1Q2020 INVENTORY
9%
7%
15%
25%
29%
6%
41%
3%
27%
8%
26%
158% INCREASE OVER 2010 INVENTORY
63%
58%
44%
188%
107%
75%
57%
51%
79%
95%
65%
27%
K I N G C O U N T Y
24 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
Leary Ave NW
8th
Ave
NW
24th
Ave
NW
NW 54th St
Seav
iew
Ave
NW
NW 39th St
Leary Way N
W
NW Leary Way
NW
Market St
NW 80th St
NW 65th St
Loyal Way NW
28th
Ave
NW
NW Market St
32nd
Ave
NW
NW 85th St
Gol
den
Gar
dens
Dr N
W
NW 61st St
Seaview Pl N
W
NW Ballard Way
Shilshole Ave NW
NW 47th St
Bak
er A
ve N
W
NW 41st St
NW 42nd St
NW 54th St
NW 51st St
Mar
y A
ve N
W
Barnes Ave NW
12th
Ave
NW
26th
Ave
NW
NW Sloop Pl
21st
Ave
NW
NW 73rd St
NW 70th St
33rd
Pl N
W
NW 68th St
NW 65th Court
NW 62nd St
NW 59th St
NW 61st St
NW 56th St
Ballard
Ballard remains a sweetheart market for apartment developers to take advantage of extremely strong renter demand.
QUEEN ANNEMAGNOLIA
SEE PAGE 27
PUGET SOUND
118
20
171
78
Microhousing Pipeline
921
16% of inventory
EXISTING APARTMENT INVENTORY: 5,662 UNITS
Construction Approved In Review Total Pipeline
248 230 1,839 2,317
4% 4% 32% 41% of inventory
Ballard’s livability and highly desirable attributes spurred the development of a large supply of new, market-rate apartment units over the last several years, further pushing rental rates. The need now for more affordable apartments paves the way for microhousing developments. Ballard has the largest pipeline of microhousing at 921 units, overtaking last year’s leader, the University District. Expect this trend to continue as larger development sites become harder to find and developers seek to maximize unit count (and rental rates) on smaller parcels.
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
FREMONTGREEN LAKE
WALLINGFORDSEE PAGE 25
15th Ave C
orrid
or
52
59
54
163
151
72
50
22
22
5527 21
50
28
77170
134
90
6448
181102
106
8151
MICROHOUSING*
MIXED*
APARTMENT
K I N G C O U N T Y
Fremont, Green Lake & Wallingford
This trifecta of north-of-the-cut, idyllic urban neighborhoods draws strong attention from renters and apartment developers.
Although development sites are hard to come by in these very residential-focused (and zoned) neighborhoods, apartment developers continue to find opportunities. Phinney Ridge has a pipeline of nearly 500 units, and the Stone Way corridor continues its run as a hot spot for new development. With nearly 1,000 units in various stages of development, including five projects comprising over 100 units each, Stone Way has become its own micro-market. Expect these neighborhoods to remain in high demand among both developers and renters seeking the live-work-play dynamics of this market.
Microhousing Pipeline
708
10% of inventory
EXISTING APARTMENT INVENTORY: 6,791 UNITS
Construction Approved In Review Total Pipeline
181 156 2,564 2,901
3% 2% 38% 43% of inventory
GREEN LAKE
BALLARDSEE PAGE 24
UNIVERSITY DISTRICT & ROOSEVELT
SEE PAGE 26
99
26
PHINNEY RIDGE
FREMONT
WALLINGFORDStone W
ay Co
rrido
r
GREEN LAKE
54
42
45
88
49
19
27 202
40
77
120
32
2535
12
10
158 21
8841
116
66 78
48
5014
123
236
19140
10429
87
118
96
42
4018
80
66
120
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
MICROHOUSING*
MIXED*
APARTMENT
QUEEN ANNEMAGNOLIA
SEE PAGE 272020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS 25
K I N G C O U N T Y
26 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
55th Ave N
E
Sand
Po
int W
ay N
E
25th Ave N
E
35th
Ave
NE
Union Bay Pl N
E
Prin
ceto
n A
ve N
E
NE Princeton Way
NE Blakeley St
Ravenna Pl NE
NE 55th St
NE 70th St
8th
Ave
NE
12th
Ave
NE
Roo
seve
lt W
ay N
E
NE Pacific St
NE 45th St
NE 65th St
NE 75th St
NE 65th St
NE 74th St
NE 45th St
Cowen Pl N
E
20th Ave N
E
NE 50th St
NE 47th St
NE 43rd St
NE 73rd St
NE 70th St
Pend
Ore
ille
Rd N
E
NE Campus Pkwy
7th
Ave
NE
Bro
okl
yn A
ve N
E
NE 41st St
43rd
Ave
NE
64th Ave N
E
NE Keswick Dr
NE Park Pl
NE 65th St
Oberlin Ave NE
56th Ave N
E
52nd A
ve NE
E Laurel Dr N
E
47th
Ave
NE
44th Pl NE
43rd A
ve NE
31st Ave N
E
30th
Ave
NE
Terrace Dr NE
39th
Ave
NE
34th
Ave
NE
Fran
klin
Pl N
E
37th Ave N
E
40th Ave N
E
NE 38th St
26th
Ave
NE
NE Naomi Pl
NE 49th St
Ravenna Ave N
E
22nd
Ave
NE
17th
Ave
NE
NE 67th St
NE 70th St
NE 73rd St
7th
Ave
NE
NE 60th St
NE 47th St
NE 41st St
NE 55th St
NE 64th St
NE 43rd St
55th Ave N
E
Sand
Po
int W
ay N
E
25th Ave N
E
35th
Ave
NE
Union Bay Pl N
E
Prin
ceto
n A
ve N
E
NE Princeton Way
NE Blakeley St
Ravenna Pl NE
NE 55th St
NE 70th St
8th
Ave
NE
12th
Ave
NE
Roo
seve
lt W
ay N
E
NE Pacific St
NE 45th St
NE 65th St
NE 75th St
NE 65th St
NE 74th St
NE 45th St
Cowen Pl N
E
20th Ave N
E
NE 50th St
NE 47th St
NE 43rd St
NE 73rd St
NE 70th St
Pend
Ore
ille
Rd N
E
NE Campus Pkwy
7th
Ave
NE
Bro
okl
yn A
ve N
E
NE 41st St
43rd
Ave
NE
64th Ave N
E
NE Keswick Dr
NE Park Pl
NE 65th St
Oberlin Ave NE
56th Ave N
E
52nd A
ve NE
E Laurel Dr N
E
47th
Ave
NE
44th Pl NE
43rd A
ve NE
31st Ave N
E
30th
Ave
NE
Terrace Dr NE
39th
Ave
NE
34th
Ave
NE
Fran
klin
Pl N
E
37th Ave N
E
40th Ave N
E
NE 38th St
26th
Ave
NE
NE Naomi Pl
NE 49th St
Ravenna Ave N
E
22nd
Ave
NE
17th
Ave
NE
NE 67th St
NE 70th St
NE 73rd St
7th
Ave
NE
NE 60th St
NE 47th St
NE 41st St
NE 55th St
NE 64th St
NE 43rd St
University District & Roosevelt
Fueled by an upzone, light rail expansion, and intrinsic demand, the University District is a rising star in Urban Seattle.
Microhousing Pipeline
826
8% of inventory
EXISTING APARTMENT INVENTORY: 9,877 UNITS
Construction Approved In Review Total Pipeline
914 183 5,734 6,831
9% 2% 58% 69% of inventory
U District StationOpens 2021
Roosevelt Station
Opens 2021
ROOSEVELTROOSEVELT
56
20
66230
30
32
236
244
54
129
54
91
102
79 33
126
77
165
35
131
52
26
138
4027
10
50
98
276182
26533 54
75
43
79
42 33
200
48 2040
20
235
383224
360168
344101
211
240
18847
49
27
40 31
57
64
89
59
73
T h e U n i v e r s i t y D i s t r i c t ’s development boom continues its impressive streak. We are starting to see more growth north of NE 50th Street along University Way (“The Ave”), historically a sleepy corridor for development.
The University Village area is experiencing a development boom of its own, with more than 1,300 units on the horizon. Much of this increased activity involves developers repositioning older low-rise properties.
Roosevel t i s exper iencing monumental change as well, with numerous development sites sprouting around the light rail station set to open in 2021.
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
See Roosevelt inset to the right of this map
K I N G C O U N T Y
272020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
55th Ave N
E
Sand
Po
int W
ay N
E
25th Ave N
E
35th
Ave
NE
Union Bay Pl N
E
Prin
ceto
n A
ve N
E
NE Princeton Way
NE Blakeley St
Ravenna Pl NE
NE 55th St
NE 70th St
8th
Ave
NE
12th
Ave
NE
Roo
seve
lt W
ay N
E
NE Pacific St
NE 45th St
NE 65th St
NE 75th St
NE 65th St
NE 74th St
NE 45th St
Cowen Pl N
E
20th Ave N
E
NE 50th St
NE 47th St
NE 43rd St
NE 73rd St
NE 70th St
Pend
Ore
ille
Rd N
E
NE Campus Pkwy
7th
Ave
NE
Bro
okl
yn A
ve N
E
NE 41st St
43rd
Ave
NE
64th Ave N
E
NE Keswick Dr
NE Park Pl
NE 65th St
Oberlin Ave NE
56th Ave N
E
52nd A
ve NE
E Laurel Dr N
E
47th
Ave
NE
44th Pl NE
43rd A
ve NE
31st Ave N
E
30th
Ave
NE
Terrace Dr NE
39th
Ave
NE
34th
Ave
NE
Fran
klin
Pl N
E
37th Ave N
E
40th Ave N
E
NE 38th St
26th
Ave
NE
NE Naomi Pl
NE 49th St
Ravenna Ave N
E
22nd
Ave
NE
17th
Ave
NE
NE 67th St
NE 70th St
NE 73rd St
7th
Ave
NE
NE 60th St
NE 47th St
NE 41st St
NE 55th St
NE 64th St
NE 43rd St
W Emerson Pl
W Emerson St
Gilm
an Ave W
W Dravus St
Raye St
5th
Ave
N
Mercer St
Magnolia Bridge
14th Ave W
Que
en A
nne
Ave
NW Mercer Pl
W Galer St
Smith St
1st Ave N
W Florentia St
5th Ave W
7th
Ave
W
W Bertona St
Boston St
Gilm
an Dr W
W Tilden St
W Dravus St 9th Ave W
34th
Ave
W
W Emerson St
Wm
ont W
ay W
W V
iew
mon
t Way
W
Clise Pl W
8th Ave W
W Howe St
Tayl
or A
ve N
Roy St2n
d Av
e N
Olympic W
ay W
W Olympic Pl
W Blaine St
W Galer St6t
h Av
e W
Thor
ndyk
e Av
e W
28th
Ave
W
Mag
nolia
Blv
d W
W Republican St
W Harrison St
Queen Anne & Magnolia
This market cycle, Queen Anne and Magnolia had the smallest percentage of apartment supply growth across all Seattle neighborhoods.
Lower Queen Anne and Interbay are the only densely zoned areas in this market, limiting apartment supply growth to 6% in 2019 and Q1 2020 (for comparison, First Hill was slated for 41% supply growth based on construction activity in 2019 alone).
Queen Anne and Magnolia benefit from a limited supply of new apartment development, likely a cause for its historically low vacancy rates, even through the last downturn.
Microhousing Pipeline
200
2% of inventory
EXISTING APARTMENT INVENTORY: 10,350 UNITS
Construction Approved In Review Total Pipeline
702 102 2,157 2,961
7% 1% 21% 29% of inventory
PUGET SOUND
FREMONTGREEN LAKE
WALLINGFORDSEE PAGE 25
MAGNOLIA
QUEEN ANNE
INTERBAY
99
39
63
93
25
73
30
93
36
286
138
16744
50
64
42
32443
24
125
46
71
66
143
65 101
58 97
127
100
160 168
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
MICROHOUSING*
MIXED*
APARTMENT
K I N G C O U N T Y
28 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
Delmar Dr E
Har
vard
Ave
EValley St
9th
Ave
N
Harrison St
5th
Ave
N
Dex
ter A
ve N
Westlake A
ve N
Fairv
iew A
ve N
E Denny Way
Elak
e A
ve E
Fuhrman Ave E
E Roanoke St
Mercer St
John St
Dexter W
ay N
John St Bo
ren
Ave
N
Harrison St
Yale Pl E
Min
or A
ve E
Yale
Ave
E
Min
or A
ve N
8th Ave N
South Lake Union, Eastlake & Westlake
The market-leading pipeline of new development in South Lake Union is beginning to taper.
Microhousing Pipeline
386
3% of inventory
EXISTING APARTMENT INVENTORY: 11,984 UNITS
Construction Approved In Review Total Pipeline
1,781 388 5,194 7,363
15% 3% 43% 62% of inventory
Delmar Dr E
Har
vard
Ave
E
Valley St
9th
Ave
N
Harrison St
5th
Ave
N
Dex
ter A
ve N
Westlake A
ve N
Fairv
iew A
ve N
E Denny Way
Elak
e A
ve E
Fuhrman Ave E
E Roanoke St
Mercer St
John St
Dexter W
ay N
John St Bo
ren
Ave
N
Harrison St
Yale Pl E
Min
or A
ve E
Yale
Ave
E
Min
or A
ve N
8th Ave N
SOUTH LAKE UNIONSOUTH LAKE UNION
LAKE UNION
FREMONTGREEN LAKE
WALLINGFORDSEE PAGE 25
CAPITOL HILL
SEE PAGE 31 BELLTOWN, DOWNTOWN &
PIONEER SQUARESEE PAGE 29
99
34
84
270
374
1,097
113
167
20
10
103
126
208
56 77
30
90
187
219
61
176
190
162
230
294
143242
335
464 480
340
433
430
80
38
While the velocity of apartment development in South Lake Union continues to outpace many neighborhoods, its pipeline is declining in deliveries after a decade of exponential growth. In 2019, 3,406 units were approved and under construction, with 5,000 units in review. By Q1 2020, the number of apartments approved and under construction dropped 36%, to 2,169, with the number of units in review remaining stagnant.
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
See South Lake Union inset to the right of this map
K I N G C O U N T Y
292020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
Rainier Ave S
Jose Rizal B
ridg
e
7th
Ave
S
3rd Ave
6th Ave
Olive Way
Denny Way
Madison St
8th Ave
Fair
view
Ave
Westlake A
ve
Pine St
Pike St
Dex
ter A
ve
7th Ave
1st Ave
James St
Elliott Ave
5th Ave
Western Ave
Seattle Blvd S
5th
Ave
S
3rd
Ave
S
S Jackson St
S Royal Brougham Way
S Atlantic St
S Dearborn St
Yesler Way
Terry Ave
Blanch
ard St
Western A
ve
7th Ave
Marion St
S King St
Spring St
Ala
skan
Way
S
University St
Stew
art S
t
Elliott Ave
Vine
St
Clay S
t
Batte
ry S
tVine St
Pine St
Poplar Pl S
8th
Ave
S
7th
Ave
S
59
Belltown, Downtown & Pioneer Square
A greater number of large apartment developments are in Belltown and Downtown Seattle than the remainder of Urban King County.
Microhousing Pipeline
12
0.1% of inventory
EXISTING APARTMENT INVENTORY: 15,411 UNITS
Construction Approved In Review Total Pipeline
3,873 885 11,333 16,091
25% 6% 74% 104% of inventory
99CAPITOL HILL
SEE PAGE 31
ELLIOTT BAY
FIRST HILL & YESLER TERRACESEE PAGE 30
CENTRAL DISTRICTSEE PAGE 32
Midtown
Belltown
Downtown
Pioneer Square
International District
99
321
80
219
202
266
231
661
1,050437406312
454383
3790
428
40910
568
609250
69
105
149
186
180
59
283
156
112 212
285
324
170
119
463458
435233459
340
498
442
247
106 26
1,020
84
54
206
205
200
106
390
123
105
52% of the 25 largest developments in Urban King County are coming to Downtown Seattle. To put this massive supply into perspective, developers have proposed adding over 16,000 new units to less than one square mile of land between Yesler and Denny, West of Interstate 5. That’s a massive increase in density!
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
K I N G C O U N T Y
30 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY12
th A
ve S
E Yesler Way
E James Way
Bro
adw
ay
Boren Ave S
Boren Ave
James St
S Jackson St
Yesler Way
12th
Ave
Jefferson St
7th Ave
9th Ave
Seneca St
11th Ave
8th Ave
7th Ave
10th
Ave
E Terrace St
Terrace St
E Seneca St
Boylston Ave
Spring St
Summ
it Ave
Jefferson St
Columbia St
E Union St
Alder St
Union St
9th Ave
Terry Ave
Minor Ave
University St
First Hill & Yesler Terrace
First Hill & Yesler Terrace continue a massive reinvention.
Microhousing Pipeline
124
2% of inventory
EXISTING APARTMENT INVENTORY: 6,874 UNITS
Construction Approved In Review Total Pipeline
2,023 0 2,520 4,543
29% –% 37% 66% of inventory
First Hill’s high-rise zoning and ideal location between Downtown jobs and the lifestyle-centric Capitol Hill neighborhood continue to draw the attention of apartment developers focused on high-rise construction.
Five years from now, Yesler Terrace will not look or feel the same as it once did. Expect development sites to continue going vertical and the emergence of a walkable neighborhood.
Interestingly, microhousing is severely under-supplied in First Hill, with small units representing only 2% of all existing inventory. The affordability and simplicity of microhousing appeals to medical workers and students who inhabit these neighborhoods, creating a unique opportunity for developers.
BELLTOWN, DOWNTOWN &
PIONEER SQUARESEE PAGE 29
CENTRAL DISTRICTSEE PAGE 32
60
91
548
486
288
335
215
226
135
275
204
85
19 19
300
119
365
352
261
160
E Madison St
E Union St
23rd
Ave
Bro
adw
ayB
road
way
E
E O
live
Way
E Pike St
E Pine St
E Thomas St
15th
Ave
15th
Ave
E
13th
Ave
Harvard
Ave E
E Roy St
Mel
rose
Ave
12th
Ave
E12
th A
ve
E John St
E Aloha St
22nd
Ave
E
E Denny Way
Co
ryel
l Ct E
17th
Ave
20th
Ave
E
18th
Ave
E
11th Ave
11th
Ave
E
14th Ave
10th
Ave
E
Bro
adw
ay E
Mal
den
Ave
E
Volunteer Park Rd
Bo
ylston A
ve
E Loretta Pl
E Howell St
Bel
levu
e A
ve E
Bellevue Pl E
Mel
rose
Ave
E
Yale Ave
E Thomas St
Bel
mo
nt P
l E
Belm
ont A
ve
Bel
levu
e A
ve
Minor A
ve
Sum
mit
Ave
E
E Republican St
17th
Ave
E
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
First Hill
YeslerTerrace
K I N G C O U N T Y
312020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
E Madison St
E Union St
23rd
Ave
Bro
adw
ayB
road
way
E
E O
live
Way
E Pike St
E Pine St
E Thomas St
15th
Ave
15th
Ave
E
13th
Ave
Harvard
Ave E
E Roy St
Mel
rose
Ave
12th
Ave
E12
th A
ve
E John St
E Aloha St
22nd
Ave
E
E Denny Way
Co
ryel
l Ct E
17th
Ave
20th
Ave
E
18th
Ave
E
11th Ave
11th
Ave
E
14th Ave
10th
Ave
E
Bro
adw
ay E
Mal
den
Ave
E
Volunteer Park Rd
Bo
ylston A
ve
E Loretta Pl
E Howell St
Bel
levu
e A
ve E
Bellevue Pl E
Mel
rose
Ave
E
Yale Ave
E Thomas St
Bel
mo
nt P
l E
Belm
ont A
ve
Bel
levu
e A
ve
Minor A
ve
Sum
mit
Ave
E
E Republican St
17th
Ave
E
Capitol Hill
One of Seattle’s coolest neighborhoods maintains its appeal for new apartment development.
The development pipeline in Capitol Hill continues to grow, with an increased focus on smaller urban-infill sites adjacent to neighborhood amenities. The most sought-after sites are close to the light rail station, with 30% of the development pipeline located within a block of the station.
Capitol Hill provides for both a short commute to Downtown and easy freeway access to the Eastside, making it one of the most livable neighborhoods in the region.
Microhousing Pipeline
511
3% of inventory
EXISTING APARTMENT INVENTORY: 17,457 UNITS
Construction Approved In Review Total Pipeline
1,084 20 1,945 3,049
6% 0.1% 11% 17% of inventory
14MADISON
PARK
CENTRAL DISTRICTSEE PAGE 32
20
36
6138
36
71
30
74150
94
139
89
4476
36
15
95
36
47
50
37
14
68
3117
5029
62
91
53
60
51135
90
79
61
21
18
50
100151
34
20
1989 60
22
4134
117
36 58
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
CENTRAL DISTRICTSEE PAGE 32
See magnified section to the left of this map
NORTH CAPITOL HILL & NORTH CAPITOL HILL & MADISON PARKMADISON PARK
See North Capitol Hill & Madison Park inset to the right of this map
K I N G C O U N T Y
32 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
Central District
Lines between the Central District and Capitol Hill continue to blur.
Microhousing Pipeline
123
4% of inventory
EXISTING APARTMENT INVENTORY: 2,834 UNITS
Construction Approved In Review Total Pipeline
1,164 34 1,539 2,737
41% 1% 54% 97% of inventory
"Active" is the key word for the Central District. In relation to the neighborhood’s total development pipeline, 43% of these units are currently under construction. However, with the other half of planned units in review, additional projects breaking ground will rely heavily on the speed of the City permitting these developments.
Much of the development pipeline is located south of Cherry Street and West of 23rd Avenue, clustered in new micro-neighborhoods emerging around Seattle University and Yesler Terrace. Expect density and amenities in these pockets to soon rival Capitol Hill.
E Madison St
E Union St
E Cherry St
E Yesler St
S Jackson St
E John St
32
nd
Ave E
E Denny Way
34
h A
ve
Martin
Luth
er Kin
g Jr W
ay
23
rd A
ve S
Lakeside A
ve S
12
th A
ve
18
th A
ve
31
st Ave S
LAKE WASHINGTON
FIRST HILL & YESLER TERRACESEE PAGE 30
CAPITOL HILLSEE PAGE 31
23rd A
ve Co
rrido
r
432
46
25
532
129
76
46
114
34
38
40
17
13185
30
285
206942195
369
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
K I N G C O U N T Y
332020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
West Seattle
All eyes are on the City of Seattle as it determines how best to move forward with West Seattle Bridge repairs.
Microhousing Pipeline
423
5% of inventory
EXISTING APARTMENT INVENTORY: 7,874 UNITS
Construction Approved In Review Total Pipeline
249 35 2,280 2,564
3% 0.4% 29% 33% of inventory
HERE, Esri
0 0.3 km
0 0.2 mi1:18,050
SW Genesee St
Cal
iforn
ia A
ve S
W
39th
Ave
SW
35th
Ave
SW
SW Juneau St
SW Brandon St
SW
Ava
lon
Co
rrid
or
The Junction
SW Alaska St
WEST SEATTLE JUNCTIONWEST SEATTLE JUNCTIONELLIOTT BAY
ALKI
SEAVIEW
DELRIDGE
West Seattle Bridge
38
104
7532
35
306
9022
74
70
77
110
500
150
35 71
44
100
12
135
1515
4811
12
70
32
4424
3610 102
15
50
The West Seattle Bridge is likely not reopening until 2022 — a recent development that may have a major impact on near-term apartment fundamentals in West Seattle. Yet, apartment development patterns reflect trends of growth that took root over the last decade.
Two thirds of a l l planned development sites are currently focused around “The Junction” and the SW Avalon Way corridor. Demand in this area will be further driven by Sound Transit’s plan for the light rail to arrive in 2030. With 90% of the development pipeline still in review, developers will be paying close attention to the progress of light rail planning and construction, as well as bridge repairs, as they decide how best to move forward.
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
See West Seattle Junction inset to the
right of this map
K I N G C O U N T Y
34 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
South Seattle
Neighborhoods south of I-90 continue to receive strong interest from apartment developers.
Microhousing Pipeline
897
19% of inventory
EXISTING APARTMENT INVENTORY: 4,739 UNITS
Construction Approved In Review Total Pipeline
1,287 406 3,965 5,658
27% 9% 84% 119% of inventory
LAKE WASHINGTON
BEACON HILL
GEORGETOWN
RAINIER VALLEY
For the second year in a row, South Seattle neighborhoods maintain a development pipeline surpassing 5,500 apartment units. Like other markets across the region, apartment developments are clustering around light rail stations and transportation nodes.
South Seattle boasts the second most microhousing units in the development pipeline, trailing only Ballard. Affordability and access to transit remain major factors of the impetus to develop apartment units in these neighborhoods.
SOUTH KINGSEE PAGE 42
MERCER ISLAND
SEE PAGE 36
176
19085
80
32
57
30
31
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
See Mount Baker inset on the next page
See Columbia City inset on the next page
K I N G C O U N T Y
352020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
HERE, Esri
0 0.3 km
0 0.2 mi1:18,050
Rainier A
ve S
Martin Luther K
ing Jr W
ay S
S Genesee St
S Orcas St
S Graham St
S Alaska St
48
th A
ve S
38
th A
ve S
Lake Washington Blvd S4
4th
Ave S
42
nd
Ave S
COLUMBIA CITYCOLUMBIA CITY
HERE, Esri
0 0.3 km
0 0.2 mi1:18,050
S Holgate St
S McClellan St
S Spokane St
23
rd A
ve S
15
th A
ve S
Rainier Ave S
Martin
Luth
er Kin
g Jr W
ay S
S College St
S Hanford St
Beacon Ave S
15
th A
ve S
CENTRAL DISTRICTSEE PAGE 32
MOUNT BAKERMOUNT BAKER
312
150
43
15
160
6146
186
271 298
50
42
136
95 187
67 104
37
84
80
140
66
194
18
150
46108
35
73
2682
51
96
40
243
8032
80
45
10
271
55
25
73
168
28
93111
114
K I N G C O U N T Y
36 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
West Bellevue & Mercer Island
West Bellevue experienced major growth over the last year, led by developers pursuing luxury apartment projects in the core of Downtown Bellevue.
Microhousing Pipeline
0
–% of inventory
EXISTING APARTMENT INVENTORY: 10,677 UNITS
Construction Approved In Review Total Pipeline
897 0 5,811 6,708
8% –% 54% 63% of inventory
Last year we were surprised by a relatively small development pipeline in West Bellevue, with fewer than 2,000 units in planning. As it turns out, our research did not totally capture a massive pre-development pipeline. This year, the total pipeline in West Bellevue shows an impressive 345% increase.
Given the massive pipeline of office development projects slated for delivery in West Bellevue, it stands to reason that these apartment projects will see extremely strong absorption upon opening.
155
NE 8th St
Main St
11
8th
Ave SE
Island
Crest W
ay
Bellevu
e Way SE
11
2th
Ave SE
LAKE WASHINGTON
EAST KINGSEE PAGE 41
MERCER ISLAND
WEST BELLEVUE
Mercer Island StationOpens 2023
South Bellevue StationOpens 2023
East Main StationOpens 2023
Bellevue Downtown Station Opens 2023
135
125
220
158
259
145189
165326
250 350
515
263
102
1,307
1,940
104
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
K I N G C O U N T Y
372020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
Kirkland
Kirkland’s apartment development pipeline now outpaces Capitol Hill!
While apartment development sites are difficult to come by in Kirkland due to proscriptive zoning, large mixed-use projects are becoming increasingly more common and wildly successful.
Kirkland Urban, in downtown Kirkland, and Juanita Village, a block from the Lake in Juanita, are flourishing mixed-use centers driving additional apartment development activity in their respective neighborhoods. The development node forming around the Village at Totem Lake includes an impressive 2,100 units under construction and in review.
Expect the up-and-coming Rose Hill area to mirror these trends, as the Rose Hill Shopping Center development brings 875 new apartment units and reshapes its community.
Microhousing Pipeline
0
–% of inventory
EXISTING APARTMENT INVENTORY: 7,685 UNITS
Construction Approved In Review Total Pipeline
1,989 0 1,545 3,534
26% –% 20% 46% of inventory
HERE, Esri
0 0.3 km
0 0.2 mi1:18,050
12
339
244202
395
70
142
173
875
133
NE 116th St
NE 124th St
NE 120th St
18th St
NE 85th St
NE 80th St
NE 100th St
98
th A
ve NE
NE
12
0th
Pl
Market St
LAKE WASHINGTON
EAST KINGSEE PAGE 41
DOWNTOWN KIRKLAND
JUANITATOTEM LAKE
134
406
409
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
K I N G C O U N T Y
38 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
SUBURBAN KING DEVELOPMENT OVERVIEWThe trend of urbanization continues its expansion out of Seattle and West Bellevue’s neighborhoods, with the greatest benefactor markets located immediately to the north, east, and south. In other markets this might be considered sprawl, but developers are closely following demand in existing walkable suburban nodes, as well as the likelihood of these dynamics forming around light rail stations.
Year-over-year, the pipeline of new developments under construction and with permits in hand slowed, yet more units are in review than in previous years, demonstrating some moderation in deliveries in the next few years. A reduction in deliveries is likely well timed; however, we expect demand will outstrip supply in the next three to five years as more renters are looking for permanent communities where they can seamlessly transition from renter to homeowner.
Suburban King Development Pipeline
SNOHOMISH
EAST KING
SOUTH KING
URBAN KING
PIERCE
NORTH KING
TOTAL INVENTORY: 108,765 UNITS
UNDER CONSTRUCTION: 6,769 UNITS | 6% OF TOTAL INVENTORY
PLANS APPROVED: 533 UNITS | 0.5% OF TOTAL INVENTORY
IN REVIEW: 14,545 UNITS | 13% OF TOTAL INVENTORY
KITSAP
K I N G C O U N T Y
392020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
INVENTORY AS OF YEAR-END 2009 INVENTORY GROWTH: 2010 – 1Q2020 UNDER CONSTRUCTION
Auburn, Covington & Maple Valley
5,099 Units 622 Units 0 Units
Bothell & Kenmore 2,628 Units 1,749 Units 27 Units
Burien & White Center 4,135 Units 473 Units 0 Units
Des Moines & SeaTac 4,175 Units 308 Units 0 Units
East Bellevue & Newcastle 8,587 Units 2,270 Units 497 Units
Issaquah 2,553 Units 1,761 Units 135 Units
Kent 11,623 Units 1,083 Units 1,014 Units
North Bend & Snoqualmie 489 Units 100 Units 37 Units
North Seattle 10,290 Units 2,849 Units 655 Units
Redmond 7,119 Units 4,943 Units 2,280 Units
Renton & South Seattle 11,810 Units 1,896 Units 770 Units
Sammamish 835 Units 249 Units 0 Units
Shoreline 2,576 Units 857 Units 753 Units
Tukwila 3,017 Units 358 Units 0 Units
Woodinville 659 Units 382 Units 380 Units
NOTE: PIPELINE ONLY INCLUDES # OF UNITS CURRENTLY UNDER CONSTRUCTION. PROJECTS THAT ARE “APPROVED” OR “IN REVIEW” ARE NOT INCLUDED IN THIS CHART. CITIES NOT INCLUDED IN THIS CHART SAW NO DELIVERIES 2010 – 1Q2020 AND/OR HAVE NO UNITS CURRENTLY UNDER CONSTRUCTION.
SOURCE (INVENTORY AS OF 2010, INVENTORY GROWTH 2010 – 1Q2020): COSTAR
Suburban King Historical Deliveries & Construction Pipeline by City
13% INCREASE OVER 2010 INVENTORY
56%
9%
9%
23%
59%
3%
21%
23%
47%
16%
38%
12%
82%
30%
1%
INCREASE OVER 1Q2020 INVENTORY
5%
3%
8%
6%
5%
19%
19%
22%
6%
37%
K I N G C O U N T Y
40 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
North KingMicrohousing Pipeline
738
4% of inventory
EXISTING APARTMENT INVENTORY: 20,842 UNITS
Construction Approved In Review Total Pipeline
1,435 0 5,794 7,229
7% –% 28% 35% of inventory
North King's urban nodes in Greenwood, Northgate, and Lake City continue to see robust apartment development. More recently, the imminent opening of light rail stations in Shoreline have spurred an increase in the development pipeline, now totaling over 10% of existing inventory.
522
522
99
LAKE WASHINGTON
Shoreline South Station Opens 2024
KIRKLANDSEE PAGE 37
BOTHELLKENMORE
LAKE FOREST
PARKSHORELINE
BITTER LAKE
LAKE CITY
NORTHGATE
GREENWOOD
Northgate Station Opens
2021
Shoreline North Station Opens 2024
24
40
141 203
27
23
19
20
158
330
243
164
27200
241
209
1,358
20
128
200
49 293
3929
54 5017
62 6530
57
145
72
181 235
410
22289
295
72
31 46104
159210
150
13073
69
16
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
K I N G C O U N T Y
412020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
Microhousing Pipeline
0
–% Of inventory
EXISTING APARTMENT INVENTORY: 32,174 UNITS
Construction Approved In Review Total Pipeline
3,329 533 6,255 10,117
10% 2% 19% 31% of inventory
203
202
202
202
SOUTH KINGSEE PAGE 42
WOODINVILLE
REDMOND
SAMMAMISH
ISSAQUAHNEWCASTLE
DUVALL
NORTH BEND
NE Novelty Hill Rd
Avo
ndale Rd
154th Ave N
E
NE Union Hill Rd
140t
h A
ve N
E
132n
d A
ve N
E
NE 76th St
Bear Creek PkwyNE 70th Pl
Avond
ale
Rd N
E
West Lake Sam
mam
ish Pkwy N
E
NE 51st St
E Lake Samm
amish Pkw
y NE
148t
h A
ve N
E
NE Redmond Rd
196th Ave N
E
208t
h A
ve N
E
195t
h A
ve N
E
188t
h A
ve N
E
204th P
l NE
NE 83rd St
160t
h A
ve N
E154th Ave N
E
NE 95th St
NE 100th St
NE 90th St
185t
h A
ve N
E
170th Pl NE
NE Union Hill Rd
164t
h A
ve N
E
178th Pl NE
180t
h A
ve N
E
NE 65th St
156th Ave N
E
NE 80th St
NE 60th St
Willow
s Rd NE
188th Ave N
E
140t
h A
ve N
E
DOWNTOWN REDMONDDOWNTOWN REDMOND
Construction
992
Approved
0
In Review
1,637
Subtotal
2,629
W L
ake
Sam
mam
ish P
kwy N
E
NE 40th St
NE 20th St
156t
h A
ve N
E
148t
h A
ve N
E
Bel-Red Road
NE 12th St
116t
h A
ve S
E Main St
NE 8th St
NE 24th St
NE 40th St
NE 36th St
Nest 31st St
172n
d A
ve N
E
156t
h A
ve N
E
NE 21st St
173r
d A
ve N
E
NE 29th Pl
NE Spring Blvd
124t
h A
ve N
E
164th Ave N
E
NE 8th St
152n
d A
ve N
E
Nup
Way
134t
h A
ve N
E
140t
h A
ve N
E
120t
h A
ve N
E
Main St
116t
h A
ve N
E
136t
h Pl
NE
120t
h A
ve N
E
NE 6th St
181st Pl NE
181s
t Ave
NE
NE 27th Ct
176t
h C
t NE
160th Pl NE
NE 36th Way
157t
h Pl
NE
144th Pl NE
NE 31st WayNE 30th Ct
NE Turning St
NE 42nd St
182n
d A
ve N
E
178t
h A
ve N
E
NE 22nd Ct
166th Ave N
E
165t
h Pl
NE
171st Pl NE
163rd A
ve NE
162nd Ln N
E
164t
h Pl
NE
143r
d A
ve S
E
143rd A
ve NE
NE 11th Pl
NE 25th Pl
NE 38th Pl
NE 39th St
NE 31st Pl
NE 38th Ct
NE 34th St
NE 26th St
131st Ave N
E
Main St
128th Ave N
E
NE 14th Pl
124t
h Pl
NE
NE 3rd St
NE 9th St
SE 1st St
114t
h A
ve N
ENE 21st Pl
NE 18th Pl
NE 12th Pl
NE 16th St
NE 19th St
NE 14th St
Construction
2,096
Approved
533
In Review
1,492
Subtotal
4,121
EAST BELLEVUE / OVERLAKEEAST BELLEVUE / OVERLAKE
East Link Extension Opens 2023
Downtown Redmond Link Extension Opens
2024
204
443263
130
452
288
245
420 127
430
172
300
401
224
22
214
360
233
104
193
102
421
88
88
615
425
380
293135
176
425
87
195
354
331
98
300
80
9339
130
37
East King
Growth in East King is a direct result of strong economic drivers in Bellevue and Redmond.
Development continues to cluster around future light rail stations and areas that are highly accessible, since connectivity and ease of travel become increasingly desirable as our region continues to grow.
Even the sleepy mountain town of North Bend is experiencing new apartment development, with a recently completed 40-unit townhome project and another 130-unit apartment development in the works. A 35 minute drive to Seattle seems quite manageable when offset with fresh mountain air and limitless outdoor recreation in your backyard.
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
See East Bellevue / Overlake inset to the
right of this map
See Downtown Redmond inset to right of this map
K I N G C O U N T Y
42 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
South King
Strong renter demand and a limited apartment development pipeline leave room for growth in South King.
Microhousing Pipeline
0
–% of inventory
EXISTING APARTMENT INVENTORY: 55,749 UNITS
Construction Approved In Review Total Pipeline
2,005 0 2,496 4,501
4% –% 4% 8% of inventory
Approximately one-quarter of King County’s stock of apartment units are in South King. Accordingly, a development pipeline of fewer than 5,000 units accounts for only a small percentage of total inventory. However, extremely strong renter demand, coupled with little competition from modern apartment communities, results in a handful of new developers who are anxious to take advantage of these dynamics. Expect development to retain its focus primarily around key employment centers in Renton and Kent.
365
492
157
285
186
850
692
78
221
509
18
516
167
169
PUGET SOUND
KENT
AUBURN
SEATAC
BURIEN
TUKWILARENTON
MAPLE VALLEY
COVINGTON
FEDERAL WAY
DES MOINES
EAST KINGSEE PAGE 41
112
220
23
270
550
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
K I N G C O U N T Y
2020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS 43
44 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
452020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
04SNOHOMISH
COUNTYEMPLOYMENT OVERVIEW
DEVELOPMENT OVERVIEW
SNOHOMISH COUNTYABOVE THE SHORE-LINE
For some time now, we’ve documented the trend of residents moving out of King County in search of more affordable locales to put down roots. What was once an easterly migration is now a northward movement, just across the county line. For those who work in Seattle, living in Lynnwood or Mountlake Terrace offers the shortest commute out of Snohomish County, and developers are still working to meet that demand. Lynnwood delivered the highest count of new apartment units in Snohomish County over the last decade, with additional developments still under construction or in planning. Mountlake Terrace is also making a valiant effort with a 38% increase to its current apartment inventory as 751 units currently under construction begin to deliver.
EVERETT’S TIME TO SHINE
Reliant on Boeing and entering the current market cycle with a healthy supply of 14,000+ apartment units, Everett (and North Snohomish as a whole) drew little attention from developers over the last decade. For the future-focused, however, this is not the time to count this sub-market out. Trends in 2019 show that employment is diversifying, county council is starting the process of identifying light rail station locations to direct new development long before transit delivers in 2036, and prescient developers are set to deliver 722 new apartment units to meet growing demand as a result of investment in the Port of Everett.
40,520TOTAL INVENTORY
5,681TOTAL PIPELINE
46 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
EMPLOYMENT OVERVIEW
SNOHOMISH CONTINUES ITS UPWARD TRAJECTORY
Despite a rocky year for Boeing, Snohomish County’s largest employer, the county saw strong economic growth across our tracked metrics in 2019. This is a good indication of industry diversification increasing throughout the economic cycle. Additionally, as the cost of living continues to skyrocket throughout King County’s urban centers, many young families have ventured north to Lynnwood, Edmonds, and Snohomish for the opportunity to buy their first home
and take advantage of better pricing dynamics. These trends resulted in an overall increase for Snohomish’s employment, population, and personal income growth rates, while the unemployment rate ticked down from 3.7% to 3.1% year-over-year.
SNOHOMISH COUNTY
THE NATION
Unemployment Rate 3.1% 3.5%
Employment Growth 3.0% 1.4%
Population Growth 2.0% 0.5%
Personal Income Growth
5.7% 3.0%
Total Employment
1.2M
1.1M
1M
900K
800K
700K
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
YEAR-OVER-YEAR % INCREASE CALCULATED FROM 2018 - 2019NO. OF PERSONS EMPLOYED
2020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS 47
S N O H O M I S H C O U N T Y
Top Employers | Open Job Postings by Year
SOURCES: EMPLOYMENT SECURITY DEPARTMENT/LMEA; THE CONFERENCE BOARD, HELP WANTED ONLINE JOB ANNOUNCEMENTS
2019 JOB POSTINGS
Varsity Tutors
Swedish Health Services
Express Incorporated
Amazon
Davita Incorporated
Premera Blue Cross
Languageline Solutions
The Boeing Company
Lowe's
Providence Health & Services
0 100 200 300 400 500 600 700 800
AMAZON VENTURES NORTH
Amazon was busy in Snohomish County during 2019, breaking into the top 10 most active employers for the first time since we started tracking this data is 2017. This is largely due to Amazon’s new 100,000 square foot distribution center, which opened in Everett. Their presence is also felt in the automated delivery robot program that began in early 2019. Snohomish County’s pro-business environment may continue to draw employers north, a trend well demonstrated by employers venturing east of Lake Washington to Bellevue.
2018 JOB POSTINGS
Lowe's
State of Washington
Fluke Corporation
Emaint Enterprises
Dick's Sporting Goods
Snohomish County PUD
Premera Blue Cross
Tulalip Tribes
The Boeing Company
Providence Health & Services
0 200 400 600 800 1,000 1,200 1,400
48 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
S N O H O M I S H C O U N T Y
492020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
INCOME & INDUSTRY
Overall, the region continues to experience both employment and income growth, yet trade, aerospace, and government all remained relatively stagnant in total percentage of industry share, highlighting a trend for Snohomish County.
With Boeing facing significant headwinds for its manufacturing business, it is encouraging to see industry diversification beyond aerospace to offset Boeing’s near-term challenges. Year-over-year, we continue to track an increase in the percentage of the county’s growth associated with income produced outside the aerospace sector.
Median Household Income: Snohomish County vs. the Nation
County Employment Composition by Industry
SOURCE: EMPLOYMENT SECURITY DEPARTMENT
Total Employment
16.5%TRADE, TRANSPORTATION, & UTILITIES
13.8%AEROSPACE
13.8%GOVERNMENT
10.1%PROFESSIONAL & BUSINESS SERVICES
12.5%EDUCATION & HEALTH SERVICES
9.1%LEISURE & HOSPITALITY
4.4%FINANCIAL ACTIVITIES
1.3%NONDURABLE GOODS
8.4%CONSTRUCTION, MINING & LOGGING
3.0%OTHER SERVICES
1.7%INFORMATION
5.4%OTHER DURABLE GOODS
SOURCE: FRED
{{
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
$90K
$80K
$70K
$60K
$50K
$40K
$30K
$23,705
$13,903SNOHOMISH COUNTY
THE NATION
Y-O-Y INCREASE Y-O-Y DECREASE NO CHANGE Y-O-Y
S N O H O M I S H C O U N T Y
50 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
SNOHOMISH DEVELOPMENT OVERVIEW
The apartment development pipeline in Snohomish County remains one of the lowest in the quad-county region. It is the only market to experience a slow-down in the number of units in review, approved, and under construction.
Despite this trend, targeted areas for development carry common themes of both transit access and urbanization. Transit lines emanating from King County are connecting to future light rail stations in Mountlake Terrace and Lynnwood, and developers are responding accordingly with plans for new apartment communities.
Snohomish Development Pipeline
NORTH SNOHOMISH
KING
SOUTH SNOHOMISH
TOTAL INVENTORY: 40,520 UNITS
UNDER CONSTRUCTION: 2,186 UNITS | 5% OF TOTAL INVENTORY
PLANS APPROVED: 0 UNITS | –% OF TOTAL INVENTORY
IN REVIEW: 3,495 UNITS | 9% OF TOTAL INVENTORY
S N O H O M I S H C O U N T Y
512020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
INVENTORY AS OF YEAR-END 2009 INVENTORY GROWTH: 2010 – 1Q2020 UNDER CONSTRUCTION
Arlington 428 Units 665 Units 0 Units
Bothell 2,800 Units 828 Units 70 Units
Edmonds 2,337 Units 312 Units 0 Units
Everett 14,106 Units 675 Units 914 Units
Lake Stevens 160 Units 591 Units 0 Units
Lynnwood 7,162 Units 1,357 Units 451 Units
Marysville 1,135 Units 650 Units 0 Units
Mill Creek 2,051 Units 180 Units 0 Units
Mountlake Terrace 1,829 Units 123 Units 751 Units
Monroe 503 Units 0 Units 0 Units
Snohomish 183 Units 0 Units 0 Units
Stanwood 241 Units 48 Units 0 Units
NOTE: PIPELINE ONLY INCLUDES # OF UNITS CURRENTLY UNDER CONSTRUCTION. PROJECTS THAT ARE “APPROVED” OR “IN REVIEW” ARE NOT INCLUDED IN THIS CHART. CITIES NOT INCLUDED IN THIS CHART SAW NO DELIVERIES 2010 – 1Q2020 AND/OR HAVE NO UNITS CURRENTLY UNDER CONSTRUCTION.
SOURCE (INVENTORY AS OF 2010, INVENTORY GROWTH 2010 – 1Q2020): COSTAR
Snohomish Historical Deliveries & Construction Pipeline by City
155% INCREASE OVER 2010 INVENTORY
30%
13%
5%
369%
19%
57%
9%
7%
20%
2% INCREASE OVER 1Q2020 INVENTORY
6%
5%
38%
S N O H O M I S H C O U N T Y
52 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
While most developments in the county are still focused south and closer to the King County border, the few apartment developments planned in North Snohomish make up a considerable number of the county’s total pipeline. Affordable units make up nearly half of the pipeline, although several notable market-rate projects are also in the works along Everett’s waterfront and near Paine Field.
Redevelopment at the Port of Everett promises to revitalize Everett’s waterfront, and improved transportation will make this area increasingly accessible to King County commuters.
North Snohomish
North Snohomish’s apartment development pipeline remains steady, with a mix of both affordable and market-rate projects under development.
Microhousing Pipeline
0
–% of inventory
EXISTING APARTMENT INVENTORY: 24,535 UNITS
Construction Approved In Review Total Pipeline
914 0 984 1,898
4% –% 4% 8% of inventory
HERE, Esri
0 1.25 km
0 0.75 mi1:72,200
9
POSSESSION SOUND
ARLINGTON
2
MARYSVILLE
SNOHOMISH
EVERETT
MUKILTEO
LAKE STEVENS
PAINE FIELD
192
140
266124
192
227
121
400
30
206
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
MICROHOUSING*
MIXED*
APARTMENT
S N O H O M I S H C O U N T Y
532020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
Microhousing Pipeline
0
–% of inventory
EXISTING APARTMENT INVENTORY: 15,985 UNITS
Construction Approved In Review Total Pipeline
1,272 0 2,511 3,783
8% –% 16% 24% of inventory
*DEFINITIONS FOR “EFFICIENCY” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 62
522
999
96
527
524
CATHCART
NORTH KINGSEE PAGE 40
MALTBY
MONROEMARTHA LAKE
ALDERWOOD MANOR
LYNNWOOD
MOUNTLAKE TERRACE
EDMONDS
POSSESSION SOUND
NORTH SNOHOMISHSEE PAGE 52
112
South Snohomish
Development in South Snohomish continues to build momentum as the area establishes its own identity, distinct from Everett’s suburban sprawl and Seattle’s increased urbanization.
With its improving connectivity to Seattle, South Snohomish is an increasingly attractive location for developers. It continues to see a healthy influx of apartment supply, especially around the communities of Lynnwood and Mountlake Terrace.
Lynnwood’s retail core stands to benefit from the closure of other struggling malls in the region and is undergoing a major transformation, with new mixed-use projects at the former Sears sites at Alderwood Mall, Lynnwood Place, and Northline Village. Lynnwood’s Link light rail connection begins service in 2024, which will reduce commute times to Seattle to under 30 minutes, making Lynnwood a truly livable and convenient alternative to the region’s more traditional urban centers.
600151
123
70
328
192
240
1,370
349
360
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
S N O H O M I S H C O U N T Y
54 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
552020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
05PIERCE
COUNTYEMPLOYMENT OVERVIEW
DEVELOPMENT OVERVIEW
PIERCE COUNTYREGIONAL TIDE LIFTS ALL BOATS
The story of Pierce County isn’t unlike that of other suburban markets across the Puget Sound. As Amazon and the Link light rail continue to move south, the effects are undeniable. While all employment and income metrics predictably followed suit, Pierce County registered 8.7% personal income growth from 2018–2019 — the highest rate across all markets in the Puget Sound. The existing light rail line in Downtown Tacoma opened in 2003, and planned developments are clearly focused around both existing stations and the Hilltop Tacoma Link Extension, which is expected to open for service in 2022.
MILITARY ACTIVITY CONTINUES TO SUPPORT GROWTH
Although healthcare systems remained the most active employers from 2018 to 2019, increased hiring activity among departments of the US Army demonstrates that Joint Base Lewis-McChord is still a crucial anchor for Pierce County. Those employed at JBLM continue to drive demand for new apartment inventory in the decidedly suburban cities of Pierce; however, rent growth in the region has yet to match the pace of other Puget Sound markets while construction costs remain at all-time highs. We predict the new decade will finally see rental rates that spur a development boom across Pierce County.
59,358TOTAL INVENTORY
4,189TOTAL PIPELINE
56 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
EMPLOYMENT OVERVIEW
A ROCKETSHIP OF GROWTH
Pierce County experienced another exceptional year for employment growth (3.9%). Remarkably, personal income growth led all markets we measured, posting an exceptional growth rate of 8.7% — a 58% increase over 2018.
Private sector hiring clearly had a strong impact on incomes for residents of Pierce County, and security in public-sector defense jobs kept the overall economy stable. The county maintains the highest unemployment
rate in the region, yet given the uptick in employment year-over-year, it may simply be due to those not actively looking for work. For those seeking opportunities in Pierce County, jobs are available at increasingly higher wages.
PIERCE COUNTY
THE NATION
Unemployment Rate 5.1% 3.5%
Employment Growth 3.9% 1.4%
Population Growth 1.7% 0.5%
Personal Income Growth
8.7% 3.0%
Total Employment
450K
400K
350K
300K
250K
200K
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
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11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
YEAR-OVER-YEAR % INCREASE CALCULATED FROM 2018 - 2019NO. OF PERSONS EMPLOYED
2020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS 57
P I E R C E C O U N T Y
Top Employers | Open Job Postings by Year
SOURCES: EMPLOYMENT SECURITY DEPARTMENT/LMEA; THE CONFERENCE BOARD, HELP WANTED ONLINE JOB ANNOUNCEMENTS
2019 JOB POSTINGS
Washington Department of Health
Kaiser Permanente
United States Department of the Army
US Army
Lowe's
Amazon
Catholic Health System
Highline Medical Center
Catholic Health Initiatives
Multicare Health
0 200 400 600 800 1,000 1,200 1,400
A TIGHTENING EMPLOYMENT MARKET
Like much of the quad-county region, Pierce County experienced a decreased number of job postings from major employers year-over-year. The top 10 most active employers of 2019 posted 1,554 fewer jobs compared to 2018 — a 28% decrease. Yet Amazon continued to expand outside of King County and jumped into the Top 10 as the company looks to expand their “last mile” presence throughout the Puget Sound region.
Another notable addition to the Top 10 in 2019 was the US Army, with two separate departments taking the places of 7th and 8th. Joint Base Lewis-McChord is currently staffed by 53,000 personnel, 14,000 of whom are civilians, making it the single-largest employer in the county and the second largest in the state. These jobs represent a cumulative $5 billion annual paycheck, the majority of which is invested right back into the Pierce County economy.
2018 JOB POSTINGS
Pierce County
Deaconess Hospital
Bethel School District
Pierce College
Tacoma General Hospital
Kaiser Permanente
Good Samaritan Hospital
State of Washington
Multicare Health System
Providence Health
0 500 1,000 1,500 2,000 2,500
58 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
P I E R C E C O U N T Y
592020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
0.8% INFORMATION
INCOME & INDUSTRY
Although Pierce County has a history of being one of the Puget Sound’s leading agricultural regions, it has seen strong urbanization over the past decade. Goods-producing industries all experienced a year-over-year decline, whereas most service providing sectors experienced strong growth over the same period.
This year we began tracking a new sub-market in our research, dividing Pierce County into “Suburban Pierce” and “Urban Tacoma.” The introduction of Urban Tacoma as its own market is warranted by increased interest in Tacoma’s downtown by employers and the commercial real estate community. Improvements to downtown parks, newly-opened retail concepts, hospitality development supporting the convention center, and construction to expand light rail access are all leading to increased demand and population growth — clear signs of future economic vibrancy in Urban Tacoma.
Median Household Income: Pierce County vs. the Nation
County Employment Composition by Industry Total Employment
SOURCE: FRED
$80K
$75K
$70K
$65K
$60K
$55K
$50K
$45K
$40K
$35K
PIERCE COUNTY
THE NATION
$18,576
$13,903 {{
20.8%TRADE, TRANSPORTATION, & UTILITIES
18.3%GOVERNMENT
17.5%EDUCATION &HEALTH SERVICES
10.5%LEISURE & HOSPITALITY
10.3%PROFESSIONAL & BUSINESS SERVICES
7.6%CONSTRUCTION, MINING & LOGGING
4.5%FINANCIAL ACTIVITIES
4.4%OTHER SERVICES
SOURCE: EMPLOYMENT SECURITY DEPARTMENT
5.4%MANUFACTURING
Y-O-Y INCREASE Y-O-Y DECREASE NO CHANGE Y-O-Y
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
P I E R C E C O U N T Y
60 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
PIERCE DEVELOPMENT OVERVIEWPierce County is one of the few markets where apartment developers have not kept pace with the county’s growing economic fundamentals. With only 1,250 apartment units under construction, it is likely that demand will outpace supply in the next several years.
Relative to the overall county, Urban Tacoma will soon punch above its weight class. Each year, more and more apartment communities are planned for this rapidly expanding downtown, bolstered by urban amenities, including the extension of light rail lines.
Pierce Development Pipeline
SUBURBAN PIERCE
KINGKITSAP
URBAN TACOMA
TOTAL INVENTORY: 59,358 UNITS
UNDER CONSTRUCTION: 1,250 UNITS | 2% OF TOTAL INVENTORY
PLANS APPROVED: 675 UNITS | 1% OF TOTAL INVENTORY
IN REVIEW: 2,264 UNITS | 4% OF TOTAL INVENTORY
P I E R C E C O U N T Y
612020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
NOTE: PIPELINE ONLY INCLUDES # OF UNITS CURRENTLY UNDER CONSTRUCTION. PROJECTS THAT ARE “APPROVED” OR “IN REVIEW” ARE NOT INCLUDED IN THIS CHART. CITIES NOT INCLUDED IN THIS CHART SAW NO DELIVERIES 2010 – 1Q2020 AND/OR HAVE NO UNITS CURRENTLY UNDER CONSTRUCTION.
SOURCE (INVENTORY AS OF 2010, INVENTORY GROWTH 2010 – 1Q2020): COSTAR
Pierce Historical Deliveries & Construction Pipeline by City
INVENTORY AS OF YEAR-END 2009 INVENTORY GROWTH: 2010 – 1Q2020 UNDER CONSTRUCTION
DuPont 232 Units 338 Units 0 Units
Fife, Edgewood, Milton & South Auburn
3,384 Units 1,027 Units 292 Units
Gig Harbor 1,216 Units 237 Units 0 Units
Graham 165 Units 188 Units 0 Units
Lakewood, Parkland & University Place
10,784 Units 919 Units 126 Units
Puyallup, Sumner & Bonney Lake
8,043 Units 1,491 Units 429 Units
Tacoma & Ruston 21,253 Units 3,107 Units 403 Units
146% INCREASE OVER 2010 INVENTORY
30%
19%
114%
9%
19%
15%
7% INCREASE OVER 1Q2020 INVENTORY
1%
4%
2%
P I E R C E C O U N T Y
62 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
Microhousing Pipeline
0
–% of inventory
EXISTING APARTMENT INVENTORY: 53,250 UNITS
Construction Approved In Review Total Pipeline
981 84 1,462 2,527
2% 0.2% 3% 5% of inventory
512
167
16
163
7
410
509
Suburban Pierce
Pierce County historically looked to Tacoma for growth, but is now seeing an expanded apartment development pipeline in its flourishing suburban communities.
SOUTH KINGSEE PAGE 42
UNIVERSITY PLACE
LAKEWOOD MIDLAND
FIFELAKE
TAPPS
SPANAWAY
PUYALLUP
SOUTH HILL
ORTING
BONNEY LAKE
SUMNER
MILTON
COMMENCEMENT BAY
Following a year in which Tacoma’s development pipeline made up over 70% of apartment units under construction in all of Pierce County, Suburban Pierce hit the ground running in 2020, now comprising 78% of the county’s units under construction. Led by light rail extensions and the fastest-growing construction industry in the State of Washington, we stay bullish on Pierce County.
84
126
134
189 240
232
292
119
80
520
264
78
64 105
URBAN TACOMASEE PAGE 63
MICROHOUSING*
MIXED*
APARTMENT
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
P I E R C E C O U N T Y
632020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
MICROHOUSING*
MIXED*
APARTMENT Microhousing Pipeline
65
1% of inventory
EXISTING APARTMENT INVENTORY: 6,108 UNITS
Construction Approved In Review Total Pipeline
269 591 802 1,662
4% 10% 13% 27% of inventory
E 11th St
Pioneer Way E
S 21st St
E Po
rtla
nd A
ve
S Stadium W
ayC
om
merce St
N 1
st S
t
S 11th St
Division Ave
S 12th StS 13th St
S J St
S 23rd StS Yakim
a Ave
Jefferson A
ve
Center St
S Unio
n Ave
S 19th St
S Sp
rag
ue A
ve
S BRd
way St
Martin Luther K
ing Jr W
ay
A St
S 6th Ave
E Marshall Ave
Linco
ln A
ve
Milw
aukee Way
Milwa Eells
Trans
N Frontage Rd
E G St
E D St
E 26th St
E 15th St
Do
ck St
A S
tE 23rd St
Market St
Saint Helens A
ve
Co
mm
erce St
Tacom
a Ave S
S J St
E L St
E Grand
view A
ve
E Roo
sevelt Ave
E 32nd St
E C St
E 34th St
S 27th St
E 27th St
E 28th St
S 25th St
S 15th St
S Trafton St
S Alder St
S St
ate
St
S Ced
ar St
N A
lder St
S Pr
oct
or
St
N U
nion Ave
N P
roct
or
St
S W
ilkes
on
St
S I St
S Pine St
S 9th St
McKinley Ave
E Portland Ave
S Lawrence St
S 18th St
111
158
229
115
247
180
93
115
283
131
MONROE
112
Urban Tacoma
Urban Tacoma is on the rise with an expanding and amenitized walkable downtown, invigorating redevelopment, and a nascent waterfront reinvention.
Traditionally, local, long-term investors dominated almost all investment activity in Downtown Tacoma. Today, with an apartment development pipeline of 1,600 units, it’s clear that outside capital is discovering a new future for this urbanizing market. Year-over-year, the apartment development pipeline more than doubled, demonstrating a bright future ahead!
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
Hilltop Tacoma Link Extension Opens 2022
Tacoma LinkOpened 2003
Tacoma Dome Extension
Opens 2030
P I E R C E C O U N T Y
64 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
IMAGE SOURCE: TOM COLLINS FLICKR
652020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
06KITSAP
COUNTYEMPLOYMENT OVERVIEW
DEVELOPMENT OVERVIEW
KITSAP COUNTYFAST FERRY FACTS
Yes, we touted the Fast Ferry as a key indicator of economic growth in Kitsap County last year, but there’s new data (our favorite!). According to Kitsap Transit, overall ridership for the Kitsap Fast Ferry routes was up 61% in 2019 — the second full year of Fast Ferry service. Increased service resulted in 477,000 passengers traveling between Seattle and Kingston or Bremerton. Adding to the allure of Kitsap living, the ability to commute quickly and car-free for Seattle employees is sure to change the landscape of this decidedly suburban market.
PLANNING TO DELIVER
Although Kitsap County entered this market cycle with the smallest supply of apartment units and delivered the least units over the last decade, the current apartment development pipeline shines a different light on activity in the market. With 2,717 units in various stages of design, permitting, and construction, Kitsap has the potential to increase its total inventory of apartment units by an impressive 29% in the near future. Supported by the highest employment growth in the region, expect to see these developments come to fruition.
9,510TOTAL INVENTORY
2,717TOTAL PIPELINE
66 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
EMPLOYMENT OVERVIEW
STEADY GROWTH IN EMPLOYMENT; POPULATION GROWTH LAGS
While indicators of a rising economy demonstrate steady growth in Kitsap County, signs still exist that population growth lags other nearby counties in the region. Results from the 2020 Census may help clarify if population is underreported.
As far as economic vibrancy, Kitsap County continues to display growth in key metrics: employment growth and personal income growth. The county certainly bests the national average in both categories, though it still faces competition within the region given the
overall economic dynamics in King, Snohomish, and Pierce counties.
More direct metrics in the apartment industry show that Kitsap renters have more buying power than they once did. In both newly built and recently updated apartments, rental rate levels are approaching and, in some cases, exceeding $2.00 per square foot.
KITSAP COUNTY
THE NATION
Unemployment Rate 4.4% 3.5%
Employment Growth 4.3% 1.4%
Population Growth 0.8% 0.5%
Personal Income Growth
5.1% 3.0%
Total Employment130K
120K
110K
100K
90K
80K
70K
60K
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
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10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
YEAR-OVER-YEAR % INCREASE CALCULATED FROM 2018 - 2019
NO. OF PERSONS EMPLOYED
2020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS 67
K I T S A P C O U N T Y
Top Employers | Open Job Postings by Year
SOURCES: EMPLOYMENT SECURITY DEPARTMENT/LMEA; THE CONFERENCE BOARD, HELP WANTED ONLINE JOB ANNOUNCEMENTS
2019 JOB POSTINGS
Languageline Solutions
Harrison Medical Center
Kitsap Mental Health Services
Lowe's
Catholic Health System
US Navy
Amazon
Highline Medical Center
Catholic Health Initiatives
US Government
0 50 100 150 200 250 300 350
KITSAP’S EMPLOYMENT BASE EXPERIENCES DIVERSIFICATION
Although defense jobs with the US Navy and government continue to serve as leading employment sectors, Kitsap County is finally experiencing some diversification with its employment base. Amazon landed in the number four spot of Kitsap’s Top 10 employers based on job postings in 2019 with a new fulfillment center in Bremerton slated to open in mid-2020.
Fast Ferry service will undoubtedly continue to make Kitsap County a more affordable and increasingly convenient option to call home as traffic congestion to the north and south of King County is not slowing.
2018 JOB POSTINGS
State of Washington
Kaiser Permanente
General Dynamics
Suquamish Clearwater Casino
Kitsap Mental Health
AmeriCorps
Olympic College
Navy
U.S. Pacific Fleet
Catholic Health Initiatives
0 100 200 300 400 500 600 700
68 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
K I T S A P C O U N T Y
692020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
INCOME & INDUSTRY
Median household income in Kitsap County routinely outpaces the rest of the nation, yet in the last year it also outpaced Snohomish and Pierce counties. Such income growth demonstrates a sharper trend line than many otherwise expected, driven by increases in both professional service jobs and construction activity.
Although still dependent on military jobs, the county is well positioned for increased interest from employers seeking a more business-friendly environment and employees seeking affordability and lifestyle (and a short commute into Seattle, when necessary). The current rate of income growth in Kitsap County relative to the region bodes well for its future.
Median Household Income: Kitsap County vs. the Nation
County Employment Composition by Industry Total Employment
40.9%PRIVATE SERVICE PROVIDING
26.4%GOVERNMENT
10.2%TRADE, TRANSPORTATION & UTILITIES
6.7%PROFESSIONAL & BUSINESS SERVICES
4.0%CONSTRUCTION MINING & LOGGING
1.9%OTHER SERVICES
7.6%LEISURE & HOSPITALITY
2.2%MANUFACTURING
SOURCE: EMPLOYMENT SECURITY DEPARTMENT
$80K
$75K
$70K
$65K
$60K
$55K
$50K
$45K
$40K
$35K
$19,423
$13,903
{{
SOURCE: FRED
KITSAP COUNTY
THE NATION
Y-O-Y INCREASE Y-O-Y DECREASE NO CHANGE Y-O-Y
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
K I T S A P C O U N T Y
70 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
KITSAP DEVELOPMENT OVERVIEWOver the course of the next several years, Kitsap County has the potential to add triple the number of apartment units that were built during the last decade, expanding its overall inventory of apartments by 29%. Although the number of units planned is relatively small — under 3,000 units — the total inventory of apartments in Kitsap County does not yet top 10,000 units.
Apartment developers are finding opportunities across the county, with an even spacing of developments from Poulsbo to Port Orchard. Surprisingly, several of these developments are larger than 300 units, and many have terrific waterfront locations. Expect to see a “trickle effect” with developers adding new units in Pierce County as they discover more opportunities across Kitsap County.
Kitsap Development Pipeline
KITSAP
KING
SNOHOMISH
PIERCE
TOTAL INVENTORY: 9,510 UNITS
UNDER CONSTRUCTION: 417 UNITS | 4% OF TOTAL INVENTORY
PLANS APPROVED: 484 UNITS | 5% OF TOTAL INVENTORY
IN REVIEW: 1,816 UNITS | 19% OF TOTAL INVENTORY
K I T S A P C O U N T Y
712020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
NOTE: PIPELINE ONLY INCLUDES # OF UNITS CURRENTLY UNDER CONSTRUCTION. PROJECTS THAT ARE “APPROVED” OR “IN REVIEW” ARE NOT INCLUDED IN THIS CHART. CITIES NOT INCLUDED IN THIS CHART SAW NO DELIVERIES 2010 – 1Q2020 AND/OR HAVE NO UNITS CURRENTLY UNDER CONSTRUCTION.
SOURCE (INVENTORY AS OF 2010, INVENTORY GROWTH 2010 – 1Q2020): COSTAR
Kitsap Historical Deliveries & Construction Pipeline by City
INVENTORY AS OF YEAR-END 2009 INVENTORY GROWTH: 2010 – 1Q2020 UNDER CONSTRUCTION
Bainbridge Island 229 Units 196 Units 0 Units
Bremerton 4,152 Units 341 Units 417 Units
Port Orchard 1,559 Units 269 Units 0 Units
Poulsbo 554 Units 91 Units 0 Units
Silverdale 2,036 Units 0 Units 0 Units
86% INCREASE OVER 2010 INVENTORY
8%
17%
16%
INCREASE OVER 1Q2020 INVENTORY9%
K I T S A P C O U N T Y
72 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
3
303
305
307
3
16
160
Microhousing Pipeline
40
0.4% of inventory
EXISTING APARTMENT INVENTORY: 9,510 UNITS
Construction Approved In Review Total Pipeline
417 484 1,816 2,717
4% 5% 19% 29% of inventory
MICROHOUSING*
MIXED*
APARTMENT
URBAN KINGSEE PAGE 22
ELLIOT BAY
SOUTH KINGSEE PAGE 42
NORTH KINGSEE PAGE 40POULSBO
SILVERDALE
BREMERTON
BAINBRIDGE ISLAND
PORT ORCHARDGORST
ERLANDS POINT – KITSAP LAKE
PORT ORCHARD
DYES INLET
216CROSBY
HOODCANAL
PUGET SOUND
Kitsap
Although high costs remain a barrier to new construction, growing demand in Kitsap County signals the potential for a future influx of active apartment development.
More apartment units are under development in Belltown than the entire inventory of apartments in Kitsap County, demonstrating the challenge of overcoming high construction costs so that suburban development makes financial sense.
However, given the success of many value-add projects across Kitsap County pushing apartment rental rates beyond the $2.00 per square foot mark, future development opportunities are evident. Looking to other suburban markets in the Puget Sound to predict future activity, we found that similar market dynamics were present just prior to the arrival of construction cranes. Keep an eye out across the Sound!
540
27
78
372
121
4478
336
120
1018
*DEFINITIONS FOR “MICROHOUSING” & “MIXED” DEVELOPMENTS AVAILABLE ON PAGE 76
See Downtown Bremerton inset on
the next page
K I T S A P C O U N T Y
732020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
E Chester R
d
Wo
od
s R
d E
Bea
ch D
r E
Perr
y A
ve N
E
Tren
ton
Ave
NE
Harkins St
Whe
ato
n W
ay
Sheridan Rd
Lebo BlvdPi
ne R
d N
E
Tracyton Beach Rd NW
6th St
11th St
Kitsap Way
E Collins Rd
Paci
fic A
ve
Juniper St
Farragut Ave
1st St
S M
ario
n A
ve
Cam
bri
an A
ve S
Nav
al A
ve
Charle
ston
Bea
ch R
d W
Clare A
ve
Callahan Dr
E 30th St
Bre
mer
ton
Blv
d
Oys
ter
Bay
Ave
SN
Oys
ter
Bay
Ave
Rocky Point Rd
Russell Rd
Union
Ave
Roosevelt Blvd
Russell R
d
Auto Center Blvd
Rocky Po
int Rd
NW
Nat
iona
l Ave
N
Auto Center W
ay
Wencker Way
Higbee Rd
Sinclair Way
Werner Rd
Natio
nal Ave S
Pear
y Rd
1st St
Burwell St
Cal
low
Ave
S Decatur Ave
W H
ills Blvd
Birch St
Hom
er R
Jon
es D
r
Pend
erg
ast P
kwy
SINCLAIR INLET
DOWNTOWN BREMERTONDOWNTOWN BREMERTON
186
111
109
145
56
110
40
K I T S A P C O U N T Y
74 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
752020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
07DATA
SOURCES & DEFINITIONS
76 KIDDER MATHEWS SIMON | ANDERSON TEAM 2020 APARTMENT MARKET STUDY
DATA SOURCES & DEFINITIONS
DATA SOURCES
DEVELOPMENT DATA
City of Bellevue - Major Projects List
City of Redmond - Projects Viewer
CoStar
Geographic Information Systems division of Kitsap County Application Services
King County Registrar
O’Connor Consulting
Seattle in Progress
Snohomish County Registrar
Yardi Matrix
EMPLOYMENT DATA
CoStar
Employment Security Department/LMEA
Federal Reserve Economic Data (FRED)
Kidder Mathews Research
DEFINITIONS
Congregate StandardAverageMinimum
140–200 SF175 SF 70 SF
A type of housing that has a private sleeping room and typically a bathroom, but is not a complete dwelling unit and may share a bathroom, common kitchen, dining room, and facilities with other units.
Allowed in certain zones
Micro Studios StandardAverageMinimum
150–250 SF200 SF90 SF
An apartment or townhouse dwelling unit consist-ing of no more than eight sleeping suites (private room with private bath) and one common kitchen or kitchen/lounge.
Not allowed (since 2014)
SEDU StandardAverageMinimum
240–320 SF275 SF240 SF
A very compact conventional studio apartment, complete with cooking and bathing facilities and closet space. The max gross floor area allowed is 320 SF — anything larger is an Efficiency Dwelling Unit (EDU).
Allowed
EDU StandardAverageMinimum
321–400 SF375 SF321 SF
A small conventional studio apartment with a main living space (“habitable space”) of no less than 220 SF.
Allowed
MICROHOUSING
MIXED DEVELOPMENTS
Mixed developments noted in this study comprise a unit mix of both standard apartment unit types and microhousing units (see definitions above).
772020 APARTMENT MARKET STUDY SIMON | ANDERSON TEAM KIDDER MATHEWS
THIS DOCUMENT WAS PREPARED BY KIDDER MATHEWS FOR ADVERTISING AND GENERAL INFORMATION ONLY. KIDDER MATHEWS MAKES NO GUARANTEES, REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESSED OR IMPLIED, REGARDING THE INFORMATION, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF CONTENT, ACCURACY, AND RELIABILITY. ANY INTERESTED PARTY SHOULD UNDERTAKE THEIR OWN INQUIRIES AS TO THE ACCURACY OF THE INFORMATION. KIDDER MATHEWS EXCLUDES UNEQUIVOCALLY ALL INFERRED OR IMPLIED TERMS, CONDITIONS, AND WARRANTIES ARISING OUT OF THIS DOCUMENT, AND EXCLUDES ALL LIABILITY FOR LOSS AND DAMAGES ARISING THEREFROM. THIS PUBLICATION IS THE COPYRIGHTED PROPERTY OF KIDDER MATHEWS.© 2020 ALL RIGHTS RESERVED
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