According to new market research released by Dylan Simon and Jerrid Anderson of Kidder Mathews, the apartment development pipeline in the Puget Sound region comprises more than 100,000 units. The market report covers apartment buildings under development with 10 or more units in King, Snohomish, Pierce, and Kitsap counties.
Although delivery dates vary based on the status of each project, the current pipeline represents a potential 30% increase to the region’s existing apartment inventory.
“Given that we are in unprecedented times, we conducted this research with two key considerations top of mind,” said Simon, executive vice president.
“The first is that the global health crisis will undoubtedly impact apartment fundamentals and change many of the plans developers made prior. And the second, that Seattle is an extremely resilient market, so analyzing this data is the best method for investors to plan for success in the long term.”
Based on the results of a survey sent to more than 300 active developers in the region, the biggest impact felt thus far is timing for permitting and construction starts. As of May 1, delays up to six months were anticipated by 86% of respondents for permitting and 88% of respondents for completion of construction.
“Over the past decade, the Puget Sound region delivered upwards of 80,000 new apartment units. A slight slowdown in apartment deliveries could be healthy for the market, providing time to continue absorbing inventory and prepare for a vibrant rebound ahead of us,” said Simon.
Estimates of job creation derived from the 10 million square feet of office space currently under construction in Seattle and the Eastside predict the need for approximately 47,000 new apartment units in the next few years, demonstrating the potential for continued demand in a market that has absorbed 10,000+ apartment units in each of the last six years. However, it is too soon to tell what the impact of COVID-19 will be on office leasing dynamics and job creation.
“Only time will tell what to expect through the second half of 2020 and into 2021. The accelerated economic fundamentals of 2019 may lie dormant for a brief period, but they are far from extinguished. We expect the Puget Sound region will lead the nation in recovery from the impacts of COVID-19,” said Simon.
The full 2020 Employment & Apartment Development Pipeline market report is now available for download at DylanSimon.com.
About the Dylan Simon and Jerrid Anderson multifamily investment team
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. As leading apartment brokers, the team releases quarterly market research reports covering sales, development, employment, rent, vacancy, and lending to provide clients with relevant and actionable data to make profitable investment decisions. For more information, visit dylansimon.com.
About Kidder Mathews
Kidder Mathews is the largest independently owned commercial real estate firm on the West Coast, with 900 real estate professionals and staff in 22 offices in Washington, Oregon, California, Nevada, and Arizona. Kidder Mathews offers a complete range of brokerage, appraisal, property management, consulting, project & construction management, and debt & equity finance services for all property types. The firm performs $9.6 billion in transactions, manages 70 million square feet of space, and conducts over 1,680 appraisals annually. For more information, visit kidder.com.