Seattle Centric: Honors for Green Building, Dropping Unemployment, & the Micro-Apartment Debate

Seattle CentricJobless rate down across Puget Sound

ID-100123804Good news for the workforce from the Seattle Times–unemployment rates fell all across the region in March. King County’s jobless rate for the month was just 5.1%, down from February’s 5.6%. Meanwhile, the rate in Snohomish County dropped to 5.7%, down from 6.3% the month before; Pierce County’s numbers, while higher, followed suit at 9.1%, down from 9.5%. Statewide, the unemployment rate droped to 7.5%, down from 8.2% in February. Read more here.

Seattle building scores spot on Top 10 Green Projects list for US

FederalCenterSouthBuilding1202_BenjaminBenschneider_atrium_landscaping1-660x989Green architecture enthusiasts rejoice–the American Institute of Architects has released their annual list of the Top 10 Green Projects in the country, and a Seattle building is on the list! The lucky winner, the Seattle Federal Center South Building 1202, located four miles south of downtown, was built in less than two and a half years by Sellen Construction and ZGF Architects. The design optimizes sunlight, utilizing a glass roof and stainless steel shingles, and its three floors wrap around a central atrium. Check out the photo gallery here.

Rainier Valley apartment project green-lighted

Screen shot 2013-04-26 at 8.22.08 AMA new 307-unit apartment building will soon start to take shape next to the Mount Baker light-rail station. The project, to be built in the place of old single-family homes, was quickly approved by the Seattle City Council on Wednesday. Next up, the Council must vote on the contract rezone. Scott Roberts, of Lake Union Partners, is confident the project will go through; “everybody wants density,” he told the Puget Sound Business Journal. According to the Journal, the property is ripe for development, and its position right along the light rail line makes it appealing for multifamily use. Check out a slideshow of the future building over at BizJournals.com.

Micro-Apartments: Problem, or solution for Seattle?

Mayor-micro-pod-3-smWe’ve written extensively in The Green Report about the micro-apartments being hailed as the solution to low vacancy and soaring rents in major cities across the US. But here in Seattle, neighborhood activists are calling for a moratorium on the housing, which is gaining popularity on Cap Hill and in the U-District. So what’s the problem? According to the Times, Seattle regulates housing development per kitchen, and not per bedroom–and since many micro-units share one kitchen, some of the new developments are “avoiding design and environmental reviews and notice to neighbors” that are usually required for multifamily projects. Increased density can also pose challenges to growing neighborhoods. Read more here.

Dupre + Scott Video Highlights: Bedroom Challenge

Have you been over to DupreScott.com lately? They’ve now got a Weekly Apartment Update video feature–published on Fridays, the videos are available right on their homepage, and they’re packed with all of the juicy data that makes Dupre + Scott such an invaluable resource for apartment data in our region.

This past Friday, their video covered The Bedroom Challenge–that is, what’s more appealing to the public in a rental unit: fewer bedrooms, or more? You can view their video right here on our blog; below, we’ve recapped some of the key data they released.

Key Facts:

  • In King, Pierce, and Snohomish counties, all types of apartments perform fairly similarly in their asking rents. Recessions cause rents to suffer uniformly, while periods of growth see the rents rising across the board. But there are subtle differences.
  • In King County, studio apartment rents have risen the most since 1997–4.3% compounded annually–with three-bedroom apartment rents rising a full percentage point less, and one- and two-bedroom apartments stair-stepping in between.
  • The same trend was found in Pierce and Snohomish counties, with some bigger variations, but the same basic concepts.
  • That percentage point translates to an increase of an extra 10% in rent growth over ten years.

There’s even more fun data in the video, but the conclusion is clear. We’ve got a winner, at least by a percentage point: it’s the studio apartment!

Ten Days of Buzz: April 6-16, 2013

Screen shot 2013-04-16 at 7.20.00 PM“In the industry we think of renters as one group of people and owners as another group of people, but they’re actually merging into one. People are going in and out of homeownership seamlessly now. We have to stay with them.”

Marilyn Wilson, partner at WAV Group. WAV Group to industry: embrace rentals or lose to third parties, Inman News, 4/6/13.

“Closet space has always been very, very important, but it’s been something that developers overlooked in the past. What we’ve all certainly learned over the years is that although kitchens and bathrooms are very, very important, you cannot overlook closets.”

Stephen Kliegerman, president of Terra Development Marking. Closets, Please, and the Bigger the Better, New York Times, 4/7/13.

“We want to make sure this transcends as more than just an experiment, but as part of the New York City landscape.”

New York City Commissioner Matt Wambua. Micro apartments get big push, New York Post, 4/8/13.

“Sandy gives us an opportunity in many places to do things we would’ve never been able to do–to allow for multifamily housing on a larger scale.”

Mitch Pally, CEO of Long Island Builders Institute. Post-Sandy rebuilding is chance for multifamily units, Newsday.com, 4/10/13.

“The 41-unit project at 151 John St., sold for $14.65 million. The price works out to $518 per square foot, which is the most paid for a Seattle multi-family property of less than 100 units.”

Tim McKay and Dan Chhan of Marcus & Millichap, as quoted by writer Marc Stiles. Stale of Uptown apartment sets Seattle record, Puget Sound Business Journal, 4/12/13.

“The ones that get hurt the most are the ones who have put a lot of money into construction with a lot of features and need to charge a high rent to justify it.”

AmericanWest Bank CEO Scott Kisting. Financiers worry Seattle’s apartment boom is overdone, Seattle Times, 4/13/13.

“This report shows that there are substantial financial benefits to implementing smoke-free policies, in addition to the health benefits those policies bring.”

Tim McAfee, director of the Office on Smoking and Health, CDC. Smoke-free subsidized housing would save $521 million a year, HealthCanal.com, 4/14/13.

“With hardly any new construction in that market last year, this year and the next couple of years, the vacancy is going to stay low, or fall even further. As a result of that, rent increases should be pretty significant.”

Mike Scott of Dupre + Scott. Investors still bullish on Puget Sound apartments, Daily Journal of Commerce, 4/15/13.

For the young generation of planners and students, this is an incredible time to live and work in the Seattle area. A huge number of public infrastructure projects…will be coming on line in the next decade. The list is long, expensive, dynamic, and the need to integrate all this is crucial.

Knute Berger, writing for Crosscut.com. How to build a better Seattle, 4/16/13.

Five Ways to…Set a Rental Price

Five Ways ToFor newcomers to the rental business, particularly for landlords with just a few units, setting an appropriate rent amount can be a daunting task. There are plenty of factors to consider when deciding on the amount to rent a house or apartment for–you want to be competitive, while also covering costs (and ideally making a profit). Here are five main factors to consider when making your decision.

1. Check out the competition. 

Unfurnished Apt for Rent

Once you’ve acquired a home or apartment that you’re planning on renting out, it’s time to do some research. Using Craigslist, SeattleRentals.com, or another site that posts rental real estate listings, check out the asking rents on comparable units in your neighborhood. You may even wish to take some walks around the neighborhood, checking out the units that are located nearby–that can give you context for the rentals that have particularly low or high asking rent amounts. Chances are, the rent you’ll ask for will end up being comparable to other units in the area.

2. Adjust for desirability.

New Apartment

We all like for things to be neat and easy; but there can be no blanket decisions when it comes to setting rent amounts. It’s important to take the factors that differ from unit to unit into consideration when making your decision. Say you have two identical units on the first and second floors of a building, with the upper unit enjoying a pretty good view of Lake Union, while the first floor unit’s view is obstructed. It may be tempting to price the units identically; but if you do so, people are likely to pass on the ground-floor unit, considering it overpriced, while the second-floor renters are enjoying a great deal. Differing amenities, closet space, square footage, and other differences must be taken into consideration when pricing multiple units.

3. Keep your costs in mind.

Budget

Hopefully it goes without saying…but it’s so important, we’ll say it anyway. It is imperative that you have your costs well in mind when your price your rental unit. If you have a mortgage on the property, that payment must be covered; then there are maintenance and operating expenses to consider. Note that while landlords won’t necessarily make a profit their first couple of years out, if this is the case, the property should be working for them in other ways–paying down the mortgage, conferring tax benefits, etc. If the unit’s not working for you, you may have over-invested.

4. Follow the market.

English: 60 Richmond Street East, an affordabl...

Rental real estate is in essence a local business; as such, landlords should follow both local and national industry news and trends as they are reported. Understanding your market is key to ensuring the rents you set are both reasonable for prospective tenants and profitable for your business. Luckily, the rental real estate industry is easier to follow than ever now; constant news articles, national resources like the NAA, and local consultants such as Dupre + Scott provide us with all the rental info we could ever need, tracking trends and reporting on different market factors. The information age is good for all of us one- or two-unit landlords out there!

5. Continue to reevaluate.

for rent

The truth is, the housing market changes–and it changes quite often. A rent you set on a unit in January 2013 may simply not be appropriate for the same unit just a year or two later. If you follow the market, when you sit down to reassess asking rents on a unit that is about to go up for rent again, you’ll have done your homework, and it will be fairly easy to determine whether the rent needs to change, or if it can remain similar to what it was before. Ideally, your asking rent will go up, based on vacancy, demand, and neighborhood popularity; that’s what we’ve seen quite a bit in the past few years. But you must also be prepared to lower the asking rent if the rental market has taken a dip. Reevaluating asking rents as the market changes will keep you–and your apartments–in the game.

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Rental Tech: Crowd-Funded Real Estate, Spotify Apartments, & Tablet Leasing “Offices”

It’s time again for Rental Tech! We’ve got the latest on the technology that’s making tenants happier, landlord’s jobs easier, and the world a cooler place…it’s a fun time we live in, isn’t it? : )

Screen shot 2013-02-21 at 9.52.41 PM

Coming soon: Smart apartments complete with Spotify and iPad Minis

Spotify Logo

Is the true era of the smart home finally upon us? It is for the future tenants of a planned apartment complex in Australia. The Imperial will rise ten stories and house 96 units in its clean, stair-stepped design–but the true draw of this building lies in its technology. Each unit will come equipped with Push Controls, Sonos sound systems, and even integrated Spotify. And for easy control of all these nifty features, each apartment will come with a free iPad mini.

While many homeowners are investing in devices from the Smart Home genre–Nest thermostats and other fun toys–this is the first we’ve heard of this technology being integrated into rental housing. Welcome to the future!  Read more.

Crowd-funding…for rental real estate?

The SEC has always regulated investments fairly strictly–but according to a new article from the LA Business Journal, they are now “inching closer” to loosening those restrictions in ways favorable for crowd-funding, and real estate companies are taking notice.

Money - Black and White Money

Realty Mogul is one such company; they have now launched their site, which gathers investors to share stakes in an apartment building or commercial space. The minimum investment is $5,000, and while the site is currently limited to accredited investors, the SEC is expected to soon make changes that will pave the way for “almost anyone who can afford the minimum investment” to jump on board. Read more.

Design of Amazon’s Denny Triangle towers changes

Image representing Amazon as depicted in Crunc...

Are you tired of hearing about Amazon’s Denny Triangle towers yet? Just a quick update today. The towers, which are sure to influence the shape of downtown for decades to come, have just gotten a bit of a re-design.

The changes will primarily affect the shorter of the structures. Bryan Stevens, a Planning and Development spokesman for the city, said that Amazon has altered its design for the base of the high-rise “from a rectilinear approach to something more distinctive and identifiable.” We can’t wait to  see what they’ve got in store. Read more.

Are tablets “the leasing offices of the future?”

While we’ve been hearing about “the office of the future” for almost as long as offices have existed now, there’s no question that tablets and smart phones have given us access to many work tools that were previously tied rather permanently to a desk. In their March issue, UNITS, a publication of the NAA, delved into what tablets can mean for landlords and leasing companies–namely, a lot less time spend in the rental office.

English: An image of an iPad 2.

While equipping leasing agents and others with tablets can require a bit of an investment, having easy-to-use and current technology can make employees “poised and comfortable,” while signaling to potential tenants (many of whom work in the tech industry themselves) that your company is keeping pace. Tablets can especially assist with tours, when “I can let you know when we get back to the office” turns into “sure, let me check on that for you.” Read more.

Seattle Centric: Job Growth, Vacancy Rates, and…Big Bertha!

Spring is upon us, and changes are afoot in downtown Seattle–in fact, we have a visitor in town to help us with those changes. That’s right, Big Bertha arrived today! She’s a world-record-breaking tunnel drilling machine, sent over from Japan just to help our engineers drill the new Highway 99 tunnels. Want to check it out? The Seattle Times has the lowdown on where you can see the machine for yourself. But for now, enjoy the rental real estate news roundup we’ve put together for you once again–welcome back to Seattle Centric.

Seattle CentricSeattle PI: Job growth strong, vacancies low within the city

Remember back in February of 2010, when the unemployment rate bottomed out? The Seattle PI has the numbers on where we’ve gotten to since then–and the news is good. According to Apartment Insights, over 100,000 jobs have been added within the Seattle area; that’s 82.3% of the jobs lost over the course of the recession.

ID-10037845 (1)Jobs are one piece of the puzzle; vacancies are another. Currently, vacancy is at 3.8% in the Puget Sound area–that’s down from 4.7% last March. And in Seattle, the market is even tighter, with vacancy at just 2.9% (down from 3.1 last year). These numbers don’t include vacant apartments that are in lease-up or under construction; as new units open, we’ll keep an eye on the vacancy numbers and see how they do. Read more.

Bizjounal: Vulcan likely to come up short in South Lake Union re-zoning

South Lake Union SkylineWe’ve been hearing for awhile now about Vulcan’s proposed plans for towers up to 240 feet tall in South Lake Union; on Monday, the Seattle City Council members indicated their votes may not end up allowing that scenario. Instead, the three towers planned for the Mercer blocks would only be allowed to top out at 160 feet.

Meanwhile, over at 400 Fairview Ave N., Skanska USA would have better luck, due to the Mayor’s proposal to raise height restrictions in that part of the neighborhood to 240 feet. Oh, those South Lake Union politics! Two votes are ahead of the Council on these rezoning issues: The first is on April 22nd, and the next will follow at the beginning of May. Read more.

DJC: For urban living, it’s all about…Bellevue?

If you’re all about Seattle, you may not have noticed the following, but Lisa Picard of Skanska USA certainly did: Between 2008 and 2011, downtown employment in Bellevue jumped more than threefold, from 12,000 to 44,000. This increase, largely driven by Microsoft, has revitalized interest in downtown Bellevue as an urban center–and apartment market vacancies are now at just 3.1%, only a couple of points higher than Seattle’s.

Bellevue, Washington

According to Picard, Bellevue’s reinvention as the area’s “second urban center” is driving a collaborative new economy in the city. “Urban areas have become playgrounds for the human experience…this is not only changing where developers supply housing, but how we do it.” While much of Bellevue’s current apartment stock is comprised of condos for rent, the future will be about flexible spaces that allow renters to “customize their own social experiences.” Read more.

My Northwest: Seattle once again among top cities for college grads

158354481With June just a few months away, it’s time for all those plucky, soon-to-be college graduates to choose their own adventure and decide where they’ll begin life as a true adult. To help them out with that choice, Rent.com has released their annual list of the 25 top markets for college graduates, factoring in the cost of living, the average annual salary, and the unemployment rate.

Once again, Seattle made the elite top ten with a mean annual income of $54,800 and a median one-bedroom apartment price of $1,300. Other cities keeping us company in the top ten included Atlanta, Boston, Denver, Raleigh, and Washington D.C. Choose wisely, grads! Read more.