1 pager: Seattle, a CRE market on fire

If you're a multifamily, office or tech investor you've been hearing a lot about Seattle lately. Both apartments and office buildings are filling up with tech people in Seattle as quickly as developers can get them built. Maybe you're back East or in the South and wondering why anyone cares about some 'secondary' market way up in the corner of the country (And still sore about them winning the Superbowl... and the NBA championship back in the day? ;).

The reason to pay attention is that the connection between those three sectors, tech, office and multifamily in Seattle is the key to understanding how growth can be generated in a market and how to figure which markets are likely to benefit from this effect. Simply put once one of the leading tech companies establishes a major base of operations in a market, other tech companies will gravitate there to poach talent.

That talent tends to be young (Gen Y) and wants to live in a lively urban environment that is public transportation rich so that owning, parking and maintaining a car is completely optional. Those young tech workers want the live, play, work life where there's no sitting in rush hour traffic in between each of those three destinations.

In Seattle it was Microsoft and a bunch other tech startups (including the Boeing Computer Services division who had a couple of Cray supercomputers for rent) in the 80's that formed a core of tech talent. When Jeff Bezos was looking for a place to start Amazon he picked Seattle because of that tech talent pool. As MSFT and AMZN grew other tech companies noticed. When desktop publishers Aldus and Adobe merged they kept the Seattle campus both to hang on to their existing Seattle talent and to poach/attract other workers who didn't fancy the freeway lifestyle in Silicon Valley.

Now Apple, Facebook and Google have large and growing offices there too:

"High-tech firms drive Seattle’s economy today. With 12 percent tech job growth in the last two years, and 43 percent since 2001, Seattle was named Forbes’ best area in the country for high-tech jobs. Real estate developers, construction companies and city transportation managers strain to keep pace with corporate expansion plans. Amazon alone expects to build more than 5 million square feet of office facilities in the next five years, creating a need for 6,000 residential units, about 60 percent of the city’s new housing projections." [Emphasis mine] See Seattle Lures Young Professionals for more.

Find out more about the Seattle market or how to spot other areas that can become tech magnets by reaching out to me here or ashworthpartners.com. Good hunting-