Often making news as the highest “crane count” in the nation (number of active cranes swings construction materials about), the Seattle and Puget Sound region’s apartment development pipeline is perpetually newsworthy. Our 2023 Apartment Development Pipeline Report summarizes development trends over the last 20 years in the Puget Sound region and maps over 140,000 units of apartment development in the Pacific Northwest.
Seattle once again tops the nation as the highest number of active cranes set against the city’s skyline.
Our research report provides both a macro look – and a detailed neighborhood/submarket study – of apartment development in each of Western Washington’s cities and counties. Additionally, we report on the following trends:
- Construction Slowdown Impacts Most Vibrant Neighborhoods
- Emerging Northend Neighborhoods Flourish
- Downtowns Remain Focal Points of New Development
Construction Slowdown Impacts Most Vibrant Neighborhoods
As Seattle and the Pacific Northwest emerged from the Great Financial Crisis, grass shoots – in the form of new apartment developments – emerged first in Seattle’s close-in, urban neighborhoods. In each of these neighborhoods apartment developers clamored for a foothold to participate in growth and revitalization – with construction pipelines often topping 1,500 to 2,000 units.
As of mid-2023, slowdowns in construction starts leave some of the most popular neighborhoods with construction pipelines as low as 500 units, nearly guaranteeing pent-up demand and rental rate appreciation far greater than forecasts provided by every data provider.
Emerging Northend Neighborhoods Flourish
While Seattle’s most coveted neighborhoods stand-by waiting for shovels to turn dirt, apartment developers continue their push to fertile new frontiers, most notably north of downtown Seattle.
We reported on the re-urbanization of these northend neighborhoods as far back as 2017, and today it’s evident that these neighborhoods such as Greenwood, Lake City, and Shoreline are seeing their due as new northend lifestyle neighborhoods.
Downtowns Remain Focal Points of New Development
Headlines and narratives wage on pontificating the future of “downtowns”, yet in the Pacific Northwest the two largest job centers – downtown Seattle and downtown Bellevue – continue to serve as focal points for new apartment development.
In both of these urban centers, apartment developers seek to double the current inventory of apartment units with development pipelines topping 16,000 units. The race is on determining who will arrive in these downtown towers first – employers or renters!
Downtown Seattle Development Pipeline
Downtown Bellevue /BelRed Corridor Development Pipeline
Telling the Future
As the calendar rolled from 2022 to 2023, most apartment investors and developers expected that by June of 2023, clarity would emerge on both interest rate stability and economic growth. Here we are in mid-June and neither is present.
We only have previous economic cycles as guides, and in each previous cycle predicting the bottom was impossible, and economic vitality arrived 6-9 months before it was broadly realized.
Much the same in 2023, growth seems further out than we can reasonable predict, yet with construction timelines the greater of 24 months, all signs point to putting a shovel in the ground now – when others will not!
About Dylan Simon:
I specialize in the sale of apartment buildings and apartment development land across Puget Sound and Washington State. Our Team of 10 apartment investment sales professionals is dedicated to helping apartment owners and investors sell and buy apartment buildings and development land from $1 million to over $100 million.
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