We all know sector rotations are common in real estate markets. Regardless of Seattle commercial real estate cycles a “good deal is a good deal”. Revenue growth is what every investor looks for in commercial real estate. Incremental yearly growth of 2-3% is national average and normal in most Seattle lease agreements. An investor should expect 2-3% increases in expenses depending on quality of management and building construction.

A good deal is a good deal in any market.

Now lets look at the industrial sub-sector where Seattle yearly revenue growth has peaked 9% in 2016. Top graph below displays Seattle overall industrial growth and the chart below displays N. Seattle retail growth in price per square foot.

 

Data-Driven Investments

NOTICE SIMILARITY BETWEEN INDUSTRIAL & RETAIL GROWTH/SALES

 

2016 Peak Graph

INDUSTRIAL PEAKED IN 2016 and RETAIL PEAKED IN 2017

Rare opportunity to observe growth between retail and industrial sub-markets. Interesting to note industrial in Seattle peaked one year earlier than retail. Analytics is not the only approach to finding a good deal, but it certainly helps to know the numbers.

Victory Lane Brokerage offers tailored advisory services as well as joint venture partnership opportunities to our increasingly diverse client base.

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Business Opportunities

Victory Lane Brokerage can execute a wide range of value-added/opportunistic investment strategies in the greater Seattle, Eastside and I-5 corridor areas.  Schedule an appointment to discuss your next venture at viccipe@gmail.com – (206) 245-0159

Repositioning

Repositioning is to determine all best uses and selecting the best one. Best use deliberation is actual construction costs necessary to attract desirable new tenants. A keen understanding of markets and clever construction applications is critical for best repositioning efforts.

Industrial

Industrial is making a comeback in demand, not for manufacturing as much, but rather logistics. Big box distribution companies need large warehouse storage and delivery facilities all across America. Some preferred locations to invest are inside urban cores and near transportation hubs like railroads, airports and shipping docks.

Offices

Office is on shaky ground in 2020. Best office investments are in the A plus category with tech companies being the most attractive tenants. Clever repositioning for B minus categories will probably be required to accommodate the newer economy.

Multi-Family

Multifamily development is normally in strong demand. Labor and materials are expensive and cover most of your development budget. To determine your investment rate of return you need to consider projected revenues. If you plan on upgrading mechanical and structural systems you must incorporate clever repositioning strategies.

Land Acquisition

Land acquisition is normally the first prelude to development. A forensic study regarding zoning, critical areas, soil conditions, etc. is necessary to ensure project compatibility.