2013 2014 2015 2016 2017 Future Total Ballard 586 616 441 82 211 1,350 Ballard 43% 46% 33% 6% 16% 100% Belltown Capitol Hill/Eastlake 769 828 862 161 618 2,469 2014 2015 2016 2017 Future Capitol Hill/Eastlake 31% 34% 35% 7% 25% 100% Green Lake/Wallingford Downtown CBD 903 709 380 418 307 1,814 2014 2015 2016 2017 Future Downtown CBD 50% 39% 0% 21% 23% 17% 100% 7% Belltown 337 486 653 902 150 3,331 5,522 7% 9% Belltown 6% 9% 12% 16% 3% 60% 100% South Lake Union 807 959 985 921 1,650 1,200 5,715 27% South Lake Union 14% 17% 17% 16% 29% 21% 100% 12% Green Lake/Wallingford 550 468 1042 125 119 1,754 59% Green Lake/Wallingford 31% 27% 59% 7% 0% 7% 100% University District 432 581 1024 744 466 2,815 University District 15% 21% 36% 0% 26% 17% 100% Queen Anne 88 379 265 103 114 861 Queen Anne 10% 44% 31% 12% 0% 13% 100% Downtown CBD 16% West Seattle 328 651 922 422 507 2,502 60% 2014 2015 2016 2017 Future West Seattle 13% 26% 37% 17% 0% 20% 100% West Bellevue 114 266 1487 124 285 1,629 3,791 West Bellevue 3% 7% 39% 3% 8% 43% 100% 3% 17% SODO 183 333 158 347 838 39% SODO 22% 40% 19% 0% 0% 41% 100% 23% First Hill 131 1248 876 2,255 21% First Hill 6% 55% 0% 0% 39% 100% 31,686 West Bellevue 2014 2015 2016 2017 Future Ballard 46% 33% 6% 16% Queen Anne SODO 2014 2015 2016 2017 Future 2014 2015 2016 Future 2014 2015 2016 2017 Future Capitol Hill/Eastlake 34% 35% 7% 25% 2014 2015 2016 2017 Future 2014 2015 2016 2017 Future 13% 7% Downtown CBD 39% 21% 23% 17% 2014 2015 2016 2017 Future 12% 44% 41% 40% Belltown 9% 12% 16% 3% 60% 43% 31% 2014 2015 2016 2017 Future 19% 39% South Lake Union 17%Find 17% out 16% which 29% neighborhoods 21%2014 SEATTLE have MULTIFAMILY URBAN MARKET STUDY 2014 2015 2016 2017 Future Green Lake/Wallingford 27%the 59% largest 7% development7% pipeline 2014 2015 2016 2017 Future First Hill South Lake Union 8% University District 21% 36% 26% 17% SOUTH LAKE UNION 2014 2015 2016 2017 Future 3% 2014 2015 2016 2017 Future 2014 2015 2016 51% 5,715 UNITS change in development Queen Anne 44% 31% 12% 13% 2017 Future pipeline from 2013 to 2014 2014 2015 2016 2017 Future 6% West Seattle 26% 37% 17% 20% 2014 2015 2016 2017 Future 17% 21% West Bellevue 7% 39% 3% 8% 43% 39% 1,986 2014 2015 2016 2017 Future UNITS 55% SODO 40% 19% 41% 2014 2015 2016 2017 Future First Hill 6% 55% 39% Ballard 17% West Seattle University District Capitol 2014 2015 2016 2017 Future 2014 2015 2016 2017 Future 2014 2015 2016 2017 Future Hill/Eastlake 2014 2015 2016 16% 29% 1,986 6% Future UNITS 45% 20% 26% 17% 21% 17% 25% 16% 33% 37% 34% 26% 7% 36% 34% SEATTLE MULTIFAMILY URBAN MARKET STUDY 2014 What every apartment investor needs to know about Seattle’s urban neighborhood development. Dylan Simon Jerrid Anderson 206-414-8575 206-382-8554 [email protected] [email protected] Dylan Simon | 206 414 8575 | www.dylansimon.com 2014 SEATTLE MULTIFAMILY URBAN MARKET STUDY DEVELOPMENT Job Growth Fuels Continued Development: PIPELINE & SWOT ANALYSIS Urban Locations Remain the Focus of Development & Investment Neighborhood This past year has again proved the In the following study we start by analyzing of each neighborhood’s development pipeline Analysis economic vitality of the Puget Sound key performance indicators from 2013. We and performance indicators. region. Our diverse employment sector, then take a qualitative look at the attributes of DOWNTOWN strong entrepreneurial engine, robust our urban neighborhoods. Finally, we take a Contact us to see how our analysis and post-secondary education system and quantitative study insights can best serve your plans in 2014. SOUTH DOWNTOWN/ high quality of life have placed us on PIONEER SQUARE the global map and provided us with an envious Post-Recession economic GREEN LAKE/WALLINGFORD/FREMONT CAPITOL HILL outlook. Having added nearly 50,000 jobs to the BALLARD FIRST HILL Seattle-Bellevue-Everett MSA in each of the last three years, and another 52,000 jobs forecasted for 2014, it is UNIVERSITY DISTRICT BELLTOWN no surprise that we are one of the few economies to have regained all jobs lost since 2008. 520 QUEEN ANNE Apartment developers have responded to demand drivers over the last several SOUTH LAKE UNION years, adding 7,320 apartment units to QUEEN ANNE the region in 2013, with plans to add WEST BELLEVUE GREEN LAKE/ another 40,000 units by 2018. SOUTH LAKE UNION WALLINGFORD/ CAPITOL HILL FREMONT In our Post-Recession economy, it BELLTOWN FIRST HILL UNIVERSITY is noteworthy that the focal point of DISTRICT investment capital is urban centers and DOWNTOWN 90 neighborhoods. This phenomenon is demonstrated by both the development SODO/PIONEER SQUARE WEST90 SEATTLE community and investment community. With an apartment development and BALLARD investment community demonstrably focused on urban centers and WEST SEATTLE neighborhoods it is increasingly WEST BELLEVUE important to analyze these markets. COLLIERS INTERNATIONAL SEATTLE 2 Dylan Simon | 206 414 8575 | www.dylansimon.com 2014 SEATTLE MULTIFAMILY URBAN MARKET STUDY 2013 Year In Review A look back at 2013 indicates a stellar year of economic vibrancy in Seattle and the In the investment sales market, marquee transactions pushed prices on a unit and square Puget Sound region. The apartment investment market gained national attention by foot basis to all-time highs for the region. A closer analysis of the urban apartment posting nation-leading rent growth at over 6.5% for the year and continued record market indicates that this market segment continues a trend of leading sales metrics occupancy levels. from both volume and value perspectives. Rental Rates Vacancy Rates Development SNOHOMISH COUNTY AND PIERCE COUNTY 6.5% 4.0% vs. 4.8% 7,320 DEVELOPMENT INCREASE IN RENTAL RATES FALL 2013 VACANCY VS. UNITS ADDED TO TRI-COUNTY IN 2013, IN THE REGION IN 2013 FALL 2012 VACANCY GREATEST NUMBER SINCE 1991 7.0% vs. 4.5% <5% 83% INCREASE IN URBAN RENTAL KING COUNTY VACANCY PERCENTAGE OF RATES IN 2013 VS. 13-YEAR FOR SEVEN CONSECUTIVE TRI-COUNTY DEVELOPMENT OVER HALF OF AVERAGE QUARTERS THAT LANDED IN KING COUNTY TRI-COUNTY KING DEVELOPMENT $1,246 $3,000 COUNTY OCCURED IN DEVELOPMENT URBAN KING COUNTY NEIGHBORHOODS SAN FRANCISCO SEATTLE SAN FRANCISCO Sub-4%SEATTLE 56% AVERAGE SEATTLE RENTAL RATE IS 2013 WAS THE FIRST ENTIRE YEAR PERCENTAGE OF TRI-COUNTY 11 LESS THAN 1/211 OF COMPARABLE11 OF SUB-4%11 VACANCY IN METRO DEVELOPMENT THAT LANDED IN 10 AVERAGE KING10 COUNTY10 RENTAL 10 9 SAN FRANCISCO9 RENT9 KING COUNTY9 SINCE 2007 8 RATE, ½ OF COMPARABLE8 8 SF RENT 8 URBAN KING COUNTY NEIGHBORHOODS 7 11% 9.8% 7 7 11% 9.8% 7 6 6 6 6 5 VACANCY 5 5 VACANCY 5 Based on data provided by Dupre + Scott POINT SPREAD by thePOINT numbers... SPREAD -3.5 Seattle+3.5 -3.5 +3.5 NUMBER ONE THIRD best Number FOUR FIFTH best city for tech jobs SECOND best U.S. city for dogs U.S. city for real city for good 5.6% (Forbes,5.3% May 2013)5.6% city for5.3% women (Estately, May 2013) estate investment UNEMPLOYMENT UNEMPLOYMENTentrepreneurs jobs (Forbes, (Urban Land Institute, (Entrepreneur February 2013) November 2013) Magazine, May 2013) DECIBELS DECIBELS 1 1 127 37 127 37 3 COLLIERS INTERNATIONAL SEATTLE 3 # OF FAN-CAUSED BEARTHQUAKES # OF 2FAN-CAUSED BEARTHQUAKES 4 5 01 2 0 2 COLLIERS IS ALL IN! COLLIERS IS ALL IN! GO SEAHAWKS! GO SEAHAWKS! Dylan Simon | 206 414 8575 | www.dylansimon.com 2014 SEATTLE MULTIFAMILY URBAN MARKET STUDY Sales—Tri-County An analysis of sales trends across the Tri-county region since the turn of the century shows a demonstrable shift towards urban markets. A look at both the number of transactions and total value of transactions illustrates both greater focus on and investment in urban markets. A review of historic capitalization rates over this same period illustrates a vast compression of capitalization rates, yet relatively consistent spreads between geographic markets. 33% vs. 14% vs. 11% 2013 2005 2000 2/3 <6 CAP URBAN TRANSACTIONS AS A % URBAN TRANSACTIONS AS A % CAP RATES ACROSS OF TRI-COUNTY TRANSACTIONS OF KING COUNTY SALES VOLUME THE REGION Since 2000, urban apartment sales in King Since 2000, urban apartment sales volume in King Cap rates across all counties County have tripled versus Tri-County County has grown by a factor of 8 versus Tri-County have compressed below 6% for sales experiencing no growth. sales growth barely tripling. nearly a decade. 117 $2.15B $1.81B 79 $1.65B $1.61B 75 $1.35B $1.16B 8.1 7.9 53 53 52 7.3 $749M $783M 5.8 5.8 5.6 5.2 5.6 5.2 5.5 33 34 4.8 4.6 $500M $550M $393M 16 19 17 6 $95.4M 2000 2005 2012 2013 2000 2005 2012 2013 2000 2005 2012 2013 NUMBER OF SALES VOLUME SALES CAP RATE TRI-COUNTY KING COUNTY URBAN KING COUNTY Based on data provided by Dupre + Scott Seattle by the numbers... World’s number NINTH best U.S. TENTH America’s SIXTH SEVEN tech town city for green homes best-paying favorite city (National Venture Number EIGHT moving destination in (Redfin, April 2013) city for women (Harris Interactive Capital Association, (Forbes, February Poll, September 2013) February 2013) the U.S.