Boasting a rapid population growth and a sustained economic expansion, Seattle’s multifamily market is vigorous and developers have been hard at work to meet the robust demand. Between 2015 and 2019 they have brought online 54,612 units in 330 assets, according to Yardi Matrix data and of these, nearly 11,000 came online last year. Despite the sustained deliveries, the occupancy rate in stabilized properties slid 20 basis points year-over-year through January to 95.1 percent.
In March, the development pipeline was robust, with more than 22,000 units in 101 properties underway. Seattle’s top five submarkets accounted for nearly half of the volume, specifically 10,306 units in 33 communities, with the bulk developed to serve the Lifestyle renter. We took a closer look at these areas and ranked them below.
The distant north/northeastern submarket posted an average rent growth above $1,600, which is somewhat affordable compared to the $1,900 overall average rent amount in Emerald City. The development pipeline had some 900 units in four properties in March, three of which are fully affordable communities totaling 734 units and the fourth is an age-restricted asset with 170 units. The occupancy rate in stabilized assets stood at 94.3 percent in January, a 90-basis point decrease year-over-year.
The largest asset is The Villas at Arlington, a 312-unit property owned by AVS Communities and located in one of Seattle’s Opportunity Zones at 18506 Smokey Point Blvd. The 16-building community is spread across more than 13 acres and has a unit mix consisting of one- to three-bedroom floor plans that average 870 square feet. The project is being built with the help of a $65 million construction loan funded by U.S. Bank, issued in October 2018.
4. First Hill
This core submarket, known for its high concentration of hospitals, will have its existing inventory boosted by 1,127 units in three Lifestyle communities once developers complete their work. The properties are being built around the St. James Cathedral and only the smallest of them, a Johnson & Carr 91-unit project, is slated for delivery by year’s end. The other two are anticipated to come online in 2021. Throughout the 12 months ending in January, the occupancy rate in stabilized properties in the submarket has remained virtually unchanged at 95.2 percent.
Lennar Multifamily Communities has the largest property under construction, the 32-story, 548-unit Ovation. The two-building mixed-use asset has a retail component of 8,400 square feet and occupies almost 1 acre at 1101 8th Ave. It is being developed using a $200 million construction loan from Wells Fargo Bank.
The occupancy rate in stabilized properties in this core submarket rose nearly 30 basis points year-over-year through January to 95.7 percent, showing strong demand for multifamily units. In response, developers have 2,086 units in 11 properties underway, four of which are fully affordable communities.
The largest development under construction is Vulcan’s two-building, 532-unit Jackson community at 2401 Jackson St. The mixed-use asset is spread across nearly 6 acres and includes 44,000 square feet of retail space and is built with the help of a $132 million construction load funded by Umpqua Bank. The unit mix consists of studios and one- to three-bedroom floor plans and includes 107 affordable apartments.
Redmond’s occupancy rate in stabilized properties clocked in at 96.4 percent in January. To meet demand, developers have 2,431 units in eight properties under construction, of which one is fully affordable and six are mixed-income communities.
Lincoln Property Co. has the largest asset underway, the 664-unit Parkside, which is slated for completion by fall. For its construction, Daiwa House Group issued in December 2016 a $138 million construction loan. The three-building property occupies almost 5 acres at 15441 NE Turing St. and has a unit mix comprising studios and one- and two-bedroom apartments averaging 801 square feet. In addition, 60 units are reserved for low-income housing.
It’s no wonder that Seattle’s most densely populated submarket holds the top position in our ranking. With an occupancy rate for stabilized properties of 94.9 percent in January, Belltown had 3,758 units in eight properties under construction in March. Of these, two assets have more than 1,000 units each, developed by Westbank Projects Corp. and Onni Real Estate.
Onni South Lake Union is the largest of the two, totaling 1,128 apartments and 28,000 square feet of retail space at 1120 Denny Way. For the project’s development, Onni Real Estate drew an undisclosed amount from a $373 million construction line of credit from Otera Capital. Completion is slated for early fall. The other 1,000-plus-unit community underway is also a mixed-use property with 150,000 square feet of retail space at 1200 Stewart Street. Westbank Projects Corp. Uses a $297 million construction loan funded by Otera Capital to complete the asset.
Yardi Matrix covers all multifamily properties of 50+ units in size across 133 markets in the United States. This ranking reflects developments underway within that sample group.