How Amazon’s Jobs Boom Has Affected Rent in Seattle

By Svenja Gudell

Seattle has one of the strongest housing markets in the country, with home value and rent growth consistently topping nationwide rankings in recent years. A strong local labor market has been an important driver of this growth, with the area being home to some of the country’s most dynamic companies, including Amazon and Microsoft (and, ahem, Zillow). Companies based elsewhere, such as Facebook and Google, have been increasingly drawn to establish satellite offices in the region.

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South Lake Union

The neighborhood of South Lake Union – home to Amazon’s headquarters – has been the epicenter of this jobs boom. Over the past decade, the area has transformed from a low-rise, post-industrial district to a cluster of high rises and amenities catering to service sector workers (e.g., coffee shops, kale salads, and yoga studios).

South Lake Union and adjacent areas are home to the highest concentrations of people who work in South Lake Union, and they have seen the largest growth in numbers of residents who work in South Lake Union – an area where the employment landscape is dominated by Amazon.

As of 2015, three out of every 200 employed adults who live in South Lake Union also work in South Lake Union, the highest density of such employees across the Seattle metro. In parts of Belltown, Capitol Hill, Lower Queen Anne, Interbay, Fremont and Ballard, one to two out of every 200 employed adults works in South Lake Union.

Seattle metro census tracts with larger increases in the number of South Lake Union workers between 2011 and 2015 saw larger rent increases (on a per square foot basis) over the same period.

For the average census tract in the Seattle metro, the South Lake Union jobs boom has been associated with faster annual rent increases between 2011 and 2015 of around $0.01 per square foot (or about $5 per month on a typical 650 square foot 1-bedroom apartment). Rents per square foot increased by about $0.05 per year on average over the same period metro-wide. So for the average Seattle metro census tract, the South Lake Union jobs boom only explains a small portion of rising rents in recent years.

The relationship is stronger looking only at census tracts within the city of Seattle. For the average census tract inside the city of Seattle, the South Lake Union jobs boom has been associated with faster annual rent increases between 2011 and 2015 of around $0.07 per square foot (or about $44 per month on a typical 650 square foot 1-bedroom apartment). Rents per square foot increased by about $0.11 per year on average over the same period city wide.

Read more — and check out the charts — at Zillow Research.

Syndicated from Forbes.com

Amazon’s Boom Has Completely Transformed the Views Downtown, SLU

By Anna Boiko-Weyrauch

Two dozen people zigzag through Seattle’s South Lake Union neighborhood, footsteps crunching on pavement and gravel. A local blog called The Urbanist organized the tour about the history of this neighborhood — the location of Amazon’s first headquarters.

In a few years, the view around HQ1 has morphed from low-slung warehouses to tall, modern apartment buildings and cranes that poke out of construction sites around every bend.

“It looks like a millennial paradise,” said Seattle resident Anthony Bridgewater, who took the tour.

Cities across North America are sending their best pitches to Amazon to host the company’s second headquarters. Seattle is among the cities making a bid, but the city’s residents are split between those who are wringing their hands over the company’s possible expansion in a different location, and those who say “no thanks.”

Seattle’s recent changes are dizzying. Just two metrics: in 10 years, the population has increased over 20 percent and the median home price has increased around 50 percent to $730,000.

The region is home to a lot of Fortune 500 companies, all driving growth, though Amazon is Seattle’s largest employer.

Pam Carter has lived in Seattle for decades. She and her husband recently moved across town after selling to developers who put up a five-story apartment building.

“Our house no longer exists,” she said. The tour passes one high rise. Carter remembers when it went up. “You suddenly couldn’t see the Olympic Mountains. And I hated that,” Carter said. Sometimes she gets lost without landmarks­­­ in sight, she said.

Terry Franguiadakis moved to Seattle in the ’90s.

“We felt like it was an empty city,” he said. “There was a lot of parking lots. It was kind of desolate.” Now it gets more vibrant every year, he said, with good restaurants, people living in the city and milling around the streets. “I think it’s great,” Franguiadakis said.

But, the city wasn’t prepared for the boom, especially not in the housing market, said Ethan Phelps-Goodman with the organization Seattle Tech 4 Housing.

Amazon’s next host should get ready quickly, so low- and middle-income people don’t get priced out, he said.

“You’re going to need to build abundant housing to go along with all those jobs that are going to stream in, not just for the Amazon employees, but for the restaurant workers, and the baristas, and the security guards, and the many, many jobs that will be created by all the new wealth,” Phelps-Goodman said.

According to Amazon, the company’s presence is a boon to Seattle’s economy, and the company gives back to the local community through philanthropy and volunteering.

The company will announce the location of its second headquarters next year.

Syndicated from Marketplace.org

Amazon Still Growing, to Lease 2nd Tallest Building in PNW

By Mike Rosenberg

Less than a month after opening up a hunt for a second headquarters, Amazon has agreed to expand in Seattle in a big way.

The company confirmed Tuesday it has signed a lease for the entire office portion of a planned downtown skyscraper called Rainier Square that will become the second-tallest building in the Pacific Northwest.

 

Even by Amazon’s standards, the expansion is substantial: Rainier Square will be among the company’s biggest office buildings when it opens in three years, with room for more than 3,500 additional employees. It’s one of the biggest leases in Seattle history.

Amazon will occupy about 722,000 square feet in the development, which is in the early stages of construction. No other company in the city has a space that large in a single building.

Amazon has been scooping up offices on a regular basis for years. It already takes up nearly 20 percent of all prime office space in Seattle, the most of any company in any major U.S. city.

But the latest lease comes amid question marks over the company’s plans for its hometown city.

Amazon said last month it would build a second headquarters somewhere in North America, which fueled speculation that the company might be slowing down or halting its growth here.

The company’s job postings in Seattle have been dropping, from about 9,000 in June to under 6,000 now. Amazon billed the second headquarters as being a “full equal” to its Seattle hub and has been signing leases to open up more large satellite offices in places like Manhattan, Silicon Valley and San Diego.

Previously, the e-commerce giant had planned to grow from its current footprint of 8.1 million square feet in Seattle to 12 million in the next five years — enough to surge from about 40,000 employees now to 60,000 later. But it hasn’t publicly talked about its local expansion plans since the HQ2 announcement.

“I’ve walked away from this with a belief that they are still growing in Seattle now, clearly, and I think they are going to continue to grow,” said Greg Johnson, president of Wright Runstad & Company, which is developing the Rainier Square project.

Even though Amazon is expanding elsewhere, “I don’t think that correlates exactly to a pullback or anything in Seattle,” he said.

Amazon declined to comment Tuesday beyond confirmation of the lease.

Brokerage Kidder Mathews reported Tuesday that Amazon is also “rumored to be looking at 300,000 square feet in another planned project” locally.

“I think this signifies Amazon’s long-term commitment to their hometown,” said Jake Bos, a Kidder Mathews vice president. He thinks Rainier Square could be the second-biggest lease in the city’s history, behind another Amazon lease.

Johnson said Rainier Square attracted “a lot of interest” by Seattle area-based companies, as well as outside firms that already have a satellite presence here. At least one other unnamed company wanted to take the entire office portion, he said.

The lease marks Amazon’s first move into the downtown core, after taking up about three dozen buildings in South Lake Union and the Denny Triangle. Rainier Square — at Fourth Avenue and Union Street — is about a half-mile south of any of Amazon’s existing offices.

Office brokers have noted that while smaller businesses have been priced out of South Lake Union because of the growing tech scene there, central downtown had been somewhat isolated from the Amazon effect. That could change with Amazon now expanding into the downtown core.

When Wright Runstad began planning Rainier Square three years ago, “the folks at Amazon really didn’t want to hear anything about it,” Johnson said. But then the company kept growing, and inching slightly farther south.

“They’re already so large and they’re still growing at a great pace,” Johnson said.

Rainier Square will stand out with its bootlike frame, featuring a wide base tapering to skinnier floors higher up. It will sit next to the existing Rainier Tower, known for its narrow, curved pedestal.

The $570 million project, approved in 2015, is being built on University of Washington property.

Demolition on the site has begun as crews knock down the existing Rainier Square shopping mall. Construction will continue through 2018 and 2019, and the office space is expected to open in summer 2020.

The 58-story tower, which will also include 200 luxury apartments, retail and an adjacent luxury hotel, will be the region’s second-tallest building when it opens, after 76-story Columbia Center.

Downtown Seattle is undergoing a record construction boom, with 74 major projects active as of July. Rainier Square is the biggest of those developments.

It’s the second time in the last several months that a developer has leased out a new Seattle skyscraper before it even opened, showing how strong demand has become for job space in the fast-growing city. In May, tech company F5 agreed to take all 516,000 square feet of office space in a new building at Fifth and Columbia that will be called F5 Tower.

Syndicated from The Seattle Times

Two Firms Propose Plans for Necessary Office Space in SLU

By Sydney Parker

Only 3.7% of office space and 1.3% of lab space is available for lease in South Lake Union, leaving much to be desired for any company hoping to settle in the hot neighborhood, JLL reports. To fill this void, Unico and BioMed Realty each put forth proposals for two big office properties in the South Lake Union market.

Seattle-based Unico Properties is planning a six- to eight-story building at 330 Yale Ave. N, according to public records, the Puget Sound Business Journal reports. The site is on the campus of Pemco’s former headquarters, which Unico bought for $51.75M at the end of 2014. Pemco relocated to its new headquarters on the west side of Lake Union in 2015.

The Seattle Daily Journal of Commerce first reported on Unico’s plans for the new building. The report named Perkins+Will as designer.

San Diego-based BioMed Realty hopes to construct a two-tower, 14-story building on the full block at 700 Dexter Ave. N. The project will have nearly 350K SF of office, 26,250 SF of ground-floor retail and restaurant space, and 520 underground parking stalls once completed.

Syndicated from Bisnow.com

Luxury Apartment Building Awarded LEED Silver

By Anca Gaguic

Modera South Lake Union, a 294-unit community located at 435 Dexter Ave. North near Seattle’s downtown, was awarded LEED Silver by the USGBC. The seven-story luxury apartment community is the first Mill Creek Residential property in Seattle to achieve the distinction.

The property was awarded the certification due to a series of green features such as:

  • the use of locally sourced materials
  • reduced construction waste
  • recycled content in materials
  • high-efficiency lighting and plumbing fixtures
  • enhanced waste management system
  • a healthy indoor environment, deemed healthy due to the use of low volatile Organic compounds (VOC) paints, coatings, sealants and adhesives, as well as a continuous, silent ventilation system and safe, formaldehyde-free wall insulation.

To achieve the LEED Silver status the community’s location was factored in too, as it has convenient access to public transit options, several community resources, eateries, job centers and nearby attractions that help limit commute times, thus cutting down on the community’s carbon footprint. In addition, from the early stages of construction, the community has been verified by an independent third-party affiliated with the USGBC.

ABOUT THE COMMUNITY

The unit mix at Modera South Lake Union includes one- to three-bedroom floor plans ranging in size from 444 to 1,144 square feet. Common area amenities include controlled-access garage parking, self-serve package lockers, a pet spa, 24-hour fitness center, clubhouse, game room, rooftop deck, theater and coffee bar. Unit interiors feature air conditioning; wood plank-style flooring; nine-foot ceilings; stainless Energy Star appliances including gas ranges; quartz countertops; USB ports; large closets and full-size washers and dryers.

The community offers easy access to Highway 99 and Interstate 5, and is adjacent to public transit options including the South Lake Union Streetcar, several bus lines and connections to the light rail. Major employers in the area include Amazon, Microsoft, University of Washington Medicine, Gates Foundation and Seattle Cancer Care Alliance.

Images courtesy of Mill Creek Residential. Syndicated from CPexecutive.com.