2016 seattle apartment market study

INSIGHTS & TRENDS IN THE SEATTLE MARKET

Dylan Simon Jerrid Anderson

SEATTLE MULTIFAMILY TEAM

Matt Laird

COLLIERS INTERNATIONAL

SEATTLE APARTMENT MARKET STUDYComprehensive Data & Analysis of Market Dynamics & Development Pipeline

The market does not trade upon what everybody knows, but upon what those with the best information can foresee.

William Hamilton

2016 Seattle Apartment Market Study

WWW.DYLANSIMON.COM 1

Matt LairdAssociateO 206 624 7416M 425 736 [email protected]

Dylan SimonVice PresidentO 206 624 7413M 206 414 [email protected]

Jerrid AndersonAssociateO 206 382 8555M 206 499 [email protected]

Ashley WoodliffProject CoordinatorO 206 223 [email protected]

Who We Are

Colliers Seattle Multifamily Team is a team of dedicated, expert commercial real estate brokers working for apartment owners, developers and investors.

Our goal is to help you maximize your return on investment, whether that is selling your apartment building faster and for more money or ensuring your purchase is a sound investment; we believe in building a long-term relationship, not just brokering a transaction.

Our 2016 Seattle Apartment Market Study is a prime example of our approach to advising our clients. By giving our clients a better understanding of current and future market dynamics we believe our clients are empowered to make better decisions and achieve higher returns. This is Brokerage Evolved.

If you have a question about our market study or want us to help you understand how market dynamics are impacting your investments, just give us a call, wed be happy to help.

Dylan SimonVice President


COLLIERS INTERNATIONAL SEATTLE2

Our team is decidedly diverse, to meet the needs of our clients and provide the highest level of brokerage services. We take a unique approach to the business, serving a complementary set of clients in the market in order to understand the market better than anyone and delivering that market knowledge to our clients.

LAND/DEVELOPMENTTRANSACTIONS

INSTITUTIONAL CLIENTS

50 UNIT - 500 UNITTRANSACTIONS

PRIVATE CLIENTS

5 UNIT - 50 UNITTRANSACTIONS

Our process is unique to the industry and provides our clients the greatest advantage over the marketplace. It leverages market expertise, use of technology and continuous thought leadership in order to provide our clients an unmatched level of service.

Our Listings Reach the Most Investors :: We reach over 7,500 commercial real estate professionals on a weekly basis, ensuring complete market coverage.

Our Marketing Turns Heads :: Our materials are often heralded as the absolute best in the business, getting more looks and more offers.

Our Research & Investment Advice Creates Trust :: Investors care about what we say, leading to higher sales prices for our clients.

Our unique process creates an advantage for our clients. Allow us to turn our expertise into

your profit.

How We Work For You



Our ResultsThe Proof is in Our Results. Our Process = Your Profit

EXPERTISE IN THE URBAN CORE

Pearl Apartments80 Unit Mixed-Use

in Heart of Capitol Hill

$33,500,000 Sales PriceRepresented Off-Market Buyer

SOPHISTICATED LAND DISPOSITIONS

GridIron Development107 Unit Residential Development

$6,000,000 Sales PriceComplicated Adaptive Reuse of Historic Building

Fully Marketed

REPRESENTING PRIVATE CLIENTS

Urbane Redmond20 Unit Mixed Use Jewel-Box Asset

$9,500,000 Sales PriceRecord Setting $450,000 / Unit

Fully Marketed

INSTITUTIONAL VALUE-ADD TRANSACTIONS

Lake Fenwick Estates216 Unit Value-Add in High-Growth Market

$32,075,000 Sales PriceTop Sales Price in South King County Market

Fully Marketed

2015 REPRESENTATIVE SALES



NORTH SNOHOMISH

SOUTH SNOHOMISH

NORTH KING

SOUTH KING

EAST KINGEASTBELLEVUE

FACTORIA

WOODINVILLE

JUANITA

REDMOND

BOTHELLSHORELINE

MOUNTLAKE TERRACE

EDMONDS

LYNNWOOD MILL CREEK

THRASHERS CORNER

CENTRALEVERETT

PAINE FIELD

SILVER LAKE

ISSAQUAH

AUBURN

KENT

SEATTLE

NORTH SEATTLE

FEDERALWAY

WHITECENTER

SEATAC

BURIEN

DESMOINES

RIVERTON/TUKWILA

RENTON

URBAN KING



Table of Contents2015 Year in Review 82015 Metrics & Fundamentals2016 Development Pipeline2000-2015 Job Growth

Urban King 18Downtown South Downtown/Pioneer Square Capitol Hill First Hill/Yesler Terrace BelltownQueen Anne South Lake UnionCentral District/Beacon Hill/Rainier ValleyGreenlake/Wallingford/FremontUniversity DistrictWest SeattleBallardWest BellevueKirkland

North King 52BothellShorelineNorth Seattle

East King 60 East BellevueFactoriaIssaquahJuanitaRedmondWoodinville

South King 68AuburnBurienDes MoinesFederal WayKentRentonRiverton/TukwilaSeaTacWhite Center

North Snohomish 78Central EverettPaine FieldSilver Lake

South Snohomish 86EdmondsLynnwoodMill CreekMountlake TerraceThrashers Corner

Sources 92

This study would not be possible without an amazing amount of hard work from our team and data providers, the latter of which are listed by category on page 92. We would like to extend special thanks to Dupre + Scott and encourage all readers

to subscribe as a direct source of data and analyticsfar beyond the snapshot we provide here. Subscribe at WWW.DUPRESCOTT.COM

2015 YEAR IN REVIEW

2015 YEAR IN REVIEW



2015

YEA

R IN

REV

IEW

Sales Data: 50+ units

Seattle by the numbers...NUMBER ONE city to find a job (WalletHub, 2015)1 SECOND best place in the country to own rental propery (All Property Management, 2015)2 THIRD highest median salary in the country (Forbes, 2015)3 FOURTH richest city in the U.S. (USA Today, 2015)4 FIFTH fastest growing city in the U.S. (Forbes, 2015)5

If ever Seattle experienced a break-out year from the standpoint of economic vibrancy and global attention, 2015 will mark that year. So too tracked the health and expansion of Seattles apartment market.

The pace at which new jobs were created and added to the Seattle economy in 2015 serves to hallmark the regions economic vigor. Over 60,000 jobs were created regionally this past year, besting the 50,000 jobs added in each of 2013 and 2014 by nearly 20%. Real wage inflation served as the cherry on top.

Apartment developers stood prepared to meet the regions demand. In 2015 over 10,000 apartments were delivered in the region with King County accounting for more than 90% of deliveries. Vacancy rates held at or below 4% in each of King and Snohomish Counties and each county experienced 8.6% rent growth continuing a two-year trend of +8% y-o-y rent growth.

Investment sales set new records well-beyond any previous peak. King and Snohomish counties experienced $3.7B in sales, a 37% gain over peak sales in 2014. Institutional investors led the march, setting new heights in values on both a price-per-unit and price-per-net rentable square foot basis.

Over 60,000 jobs were created regionally this past year, besting the 50,000 jobs added in each of 2013 and 2014 by nearly 20%. Real wage inflation served as the cherry on top.

2010 2011 2012 2013 2014 2015

Number of Sales 29 38 71 52 80 90

Total Sales Volume $545.6M $1.0B $2.1B $1.7B $2.6B $3.7B

Average PPU $130,171 $139,630 $167,123 $206,672 $193,804 $218,436

Average PPSF $150 $169 $188 $233 $238 $272

Average Cap Rate 5.9% 5.7% 5.5% 5.3% 5.3% 5.1%

Total Deliveries 3,686 1,318 4,426 5,986 8,128 10,179



2015 YEAR IN REVIEW

2015 MARKET METRICS & FUNDAMENTALSURBAN KING NORTH KING EAST KING SOUTH KING NORTH SNOHOMISH SOUTH SNOHOMISH

2015

Sal

es

29SALES

5SALES

6SALES

31SALES

10SALES

9SALES

$1.95BSALES VOLUME

$230.9MSALES VOLUME

$301.9MSALES VOLUME

$666.4MSALES VOLUME

$257.6MSALES VOLUME

$323.5MSALES VOLUME

$382,231AVERAGE PPU

$203,478AVERAGE PPU

$310,087AVERAGE PPU

$123,243AVERAGE PPU

$129,697AVERAGE PPU

$161,883AVERAGE PPU

$529AVERAGE PPSF

$247AVERAGE PPSF

$369AVERAGE PPSF

$150AVERAGE PPSF

$151AVERAGE PPSF

$188AVERAGE PPSF

4.4% AVERAGE CAP RATE






Fund

amen

tals

$1,845AVERAGE RENTAL RATE





$1,281 AVERAGE RENTAL RATE

7.1% ANNUAL RENT GROWTH

9.1%ANNUAL RENT GROWTH





4.0% VACANCY

2.8%VACANCY

3.8%VACANCY

3.8%VACANCY

4.0%VACANCY

3.8%VACANCY

Deve

lopm

ent 6,449

UNITS DELIVERED545

UNITS DELIVERED1,771

UNITS DELIVERED345

UNITS DELIVERED322

UNITS DELIVERED747

UNITS DELIVERED

9% OF URBAN KING

INVENTORY

3% OF NORTH KING

INVENTORY

5% OF EAST KING

INVENTORY

1% OF SOUTH KING

INVENTORY

2% OF NORTH SNOHOMISH

INVENTORY

4% OF SOUTH SNOHOMISH

INVENTORY

SIXTH best city for Millenials in America (Niche, 2015)6 SEVENTH best city for employee satisfaction (WalletHub, March 2014)7 EIGHTH most walkable city (Redfin, 2015)8 NINTH greenest city in America (Nerdwallet, 2015)9 TENTH best city for singles (Nerdwallet, 2015)10

Rent & Vacancy Data Provided by Dupre + Scott For more comprehensive data, visit: www.duprescott.com



2015

YEA

R IN

REV

IEW

2015 RENT GROWTH

URBAN KING7.1%

12 MONTH GROWTH

24.4% 3 YEAR GROWTH

42.4%5 YEAR GROWTH

NORTH SNOHOMISH9.3%

12 MONTH GROWTH23.2% 3 YEAR GROWTH

33.6%5 YEAR GROWTH

7.7%3 YEAR AVERAGE

SOUTH SNOHOMISH7.7%

12 MONTH GROWTH25.0% 3 YEAR GROWTH

40.2%5 YEAR GROWTH

8.3%3 YEAR AVERAGE

CUMULATIVE GROWTH

EAST KING8.2%

12 MONTH GROWTH

26.3% 3 YEAR GROWTH

41.6%5 YEAR GROWTH

8.8%3 YEAR AVERAGE

SOUTH KING8.6%

12 MONTH GROWTH

21.7% 3 YEAR GROWTH

29.2%5 YEAR GROWTH

7.2%3 YEAR AVERAGE

Rent & Vacancy Data Provided by Dupre + ScottFor more comprehensive data, visit: www.duprescott.com

CU

MU

LATI

VE G

RO

WTH

CUMULATIVE GROWTH

CU

MU

LATI

VE G

RO

WTH

CUM

ULAT

IVE

GROW

TH

North Snohomish, North King and South King were the slowest growing markets in 2014 yet, in 2015 they had the fastest y-o-y rent growth.

OUR MARKET INSIGHT

8.1%3 YEAR AVERAGE

CUM

ULA

TIVE

GRO

WTHNORTH KING

9.1%12 MONTH GROWTH

25.3% 3 YEAR GROWTH

33.9%5 YEAR GROWTH

CUM

ULAT

IVE

GROW

TH

8.4%3 YEAR AVERAGE



2015 YEAR IN REVIEW

2015 VACANCY TRENDS YEAR-OVER-YEAR

Submarket Vacancy Overview

GG4:X32

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

URBAN EASTNORTH SOUTH NORTH SOUTH

KING COUNTY SNOHOMISH COUNTY

.29%

.61%

.16%

.61%

.48%

.19%

(.10%)

(.71%)

(.36%)

(.08%)

.03% .61% .61%

1.74%

.08%

.49%

(.19%)

(.40%)

(.67%)

(1.47%)

.94%

.38%

.55% .81%

.38%

(.70%)(.56%)

(.55%)(.10%)

1.28%

.37%.99% (1.78%)

(.72%)

(.97%)

(1.14%)

(.10%)

(.03%)

.02%

South

Lake

Unio

n

Juan

ita

East

Belle

vue

.47%

ANNUAL CHANGE IN VACANCY FALL 2014- FALL 2015

Vacancy Data Provided by Dupre + ScottFor more comprehensive data, visit: www.duprescott.com

Increase in year-over-year vacancy Decrease in year-over-year vacancy

OUR MARKET INSIGHTIn 2015, over 10,000 apartment units were delivered in King and Snohomish Counties, yet in 38 of 40 markets vacancy rates measured less than a 1% increase year-over-year - 18 showing further compression in vacancy rates.



2015

YEA

R IN

REV

IEW

VS4,400UNITS

3,861 UNITS PLANNED AS OF DEC 2014

VS5,985UNITS


1,063units

1,696units

2,102units

1,124units

WESTBELLEVUE

URBAN KING DEVELOPMENT PIPELINE

2016 2017 2018 2019 FUTURE

VS8,785UNITS

6,241UNITS PLANNED AS OF DEC 2014

DOWNTOWN

2,138units

1,174units

1,040units

591units

3,842units

DELIVERIES BY YEAR2016 9,0512017 12,6652018 13,1942019 1,403Future 22,160

VS48,726

UNITS PLANNED AS OF DEC 2014

58,473 UNITS PLANNED76% OF KING COUNTY PIPELINE

68% OF TOTAL PIPELINE

VS13,133UNITS


SOUTH LAKE UNION

1,910units

4,140units

5,433units

1,650units

CENTRAL/BEACON HILL/

RAINIER VALLEY

1,776units

533units

559units

1,411units

121 units



2015 YEAR IN REVIEW

VS1,824UNITS


QUEEN ANNE

692units

468units

405units

56

259units

VS3,740UNITS


VS2,470UNITS


WEST SEATTLE

581units

1,290units

496units

214

VS4,647UNITS


VS2,150UNITS


GREENLAKE/ WALLINGFORD/

FREMONT

572units

913units582

units

83 units

2016 2017 2018 2019 FUTURE

VS850UNITS

779UNITS PLANNED AS OF DEC 2014

S. DOWNTOWN/ PIONEER SQUARE

278 units

436 units

VS1,387UNITS


BALLARD

373units

584units

367units

VS1,295UNITS


KIRKLAND

50 units

136 units

63 units

103 units

125units900

units220units

2,089units

464units

552units

1,542units

BELLTOWN

FIRST HILL/YESLER

TERRACE

1,106units

406units

275units

1,953units

VS3,498UNITS


1,571units

110 units

683units

1,134unitsUNIVERSITY

DISTRICT

VS4,309UNITS


22 units

CAPITOL HILL

1,304units

1,136units

1,204units

643units



2015

YEA

R IN

REV

IEW

VS4,739UNITS


2,666units

1,105units

800units

168 units

SOUTH KING

VS10,499

UNITS


3,974units

1,993units

1,814units

2,372units

346 unitsEAST KING

SUBURBAN KING DEVELOPMENT PIPELINE

2016 2017 2018 2019 FUTURE

VS5,265


2016 SNOHOMISHCOUNTY PIPELINE

5,325UNITS

PLANNED

VS65,489


2016 KINGCOUNTY PIPELINE

80,042UNITS

PLANNED

VS6,331UNITS


591

3,360units

682units

1,349 units

940units

NORTH KING

VS1,725UNITS


1,532units

193units

NORTH SNOHOMISH

VS3,600UNITS


1,101units

598units

507units

516units

878units

SOUTH SNOHOMISH

SNOHOMISH COUNTY SUBURBAN DEVELOPMENT PIPELINE



2015 YEAR IN REVIEW

REGIONAL JOB GROWTH

0

100,000

200,000

300,000

400,000

500,000

600,000

*Due to incomplete employment data for Nov.-Dec. 2015, the existing data was annualized and trended by industry for the six different submarkets.

STEM JOBGROWTH

14%IN LAST 4 YEARS

24% IN LAST 10 YEARS

39,093 OTHER SERVICES

6,029FIRE

HOTTEST & COLDEST job growth in the last 3 years

JOB

S

28,400JOBS2011

40,600JOBS2012

50,600JOBS2013

52,800JOBS2014

YEAR-OVER-YEAR GROWTH

61,900JOBS2015

Construction/Manufacturing Wholesale/Retail Trade/Transportation/Utilities Professional/STEM FIRE Other Services Government

Since 2010, the region has added +10,000 new Professional/STEM jobs nearly every year. 2015 was the strongest year of hiring yet, with 13,664 Professional/STEM employees hired regionally.

OUR MARKET INSIGHT

URBAN KING ::

Downtown South Downtown/Pioneer Square Capitol Hill First Hill/Yesler Terrace BelltownQueen Anne South Lake Union

Central District/Beacon Hill/Rainier ValleyGreenlake/Wallingford/FremontUniversity DistrictWest SeattleBallardWest BellevueKirkland

MARKET SNAPSHOT

MARKET OVERVIEW URBAN KING

AVERAGE RENTPER SF $2.4536,3132016-2019 DELIVERIES

4.0%VA

CANC

Y 151413

12

11

10

9

8

7

6

5

4

3

2

1

0

----

----

----



URBA

N KI

NG

Seattle

Bellevue

Redmond

Mercer Island

Sammamish

Bainbridge Island

Kirkland

Issaquah

WA 900

URBAN KINGThe regions urban-located, core neighborhoods remain the focal-point of developers and investors alike. The 14 neighborhood markets comprising Urban King are undoubtedly the most watched in the region and for that purpose alone are afforded analysis with the greatest level of granularity.

This past year marked the first year when a slew of new development was set for delivery and economic fundamentals proved strong so strong that proposed development continues to expand into future years. As of December 2014, less than 2,000 units were planned for delivery in 2018. That figure has risen to over 13,000 units.

The interest in development in these markets is no surprise given stable fundamentals. The investment sales market provides further incentive to keep developing fueled by sales prices on a PPU and PPSF basis hitting new milestones. Urban King will remain a market to watch in 2016.

Sales: Buildings 50+ units

HISTORICAL PERFORMANCE2010 2011 2012 2013 2014 2015

Number of Sales 9 8 19 17 29 29Sales Volume $232.6M $250.9M $749M $784M $1.14B $1.95BAverage PPU $200,169 $212,193 $277,864 $310,934 $305,925 $382,231Average PPSF $280 $326 $381 $437 $428 $529Average Cap Rate 5.2% 5.2% 4.8% 4.6% 4.5% 4.4%Number of Deliveries 2,645 620 2,696 4,060 5,155 6,449

As of December 2014, less than

2,000 units were planned for delivery in 2018. That figure has risen to over

13,000 units.

KIRKLAND

WESTBELLEVUE

WEST SEATTLE

DOWNTOWN

SOUTHDOWNTOWN/

PIONEERSQUARE

QUEENANNE

SOUTH LAKE UNION

BELLTOWN

BALLARDGREENLAKE/

WALLINGFORD/FREMONT

UNIVERSITY DISTRICT

CAPITOL HILL

FIRSTHILL

CENTRAL DISTRICT/

BEACON HILL/RAINIER VALLEY



URBAN KING

Rent Comparables Report Data

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Spring2000

Fall2000

Spring2001

Fall2001

Spring2002

Fall2002

Spring2003

Fall2003

Spring2004

Fall2004

Spring2005

Fall2005

Spring2006

Fall2006

Spring2007

Fall2007

Spring2008

Fall2008

Spring2009

Fall2009

Spring2010

Fall2010

Spring2011

Fall2011

Spring2012

Fall2012

Spring2013

Fall2013

Spring2014

Fall2014

Spring2015

Fall2015

2016 2017 2018 201

Rent Comparables Data - 1/7/2016 - Page 1 of 2This information is from our surveys for The Apartment Vacancy Report, B) Copyright by Dupre + Scott Apartment Advisors, Inc.

Rent Comparables Report Data

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Spring2000

Fall2000

Spring2001

Fall2001

Spring2002

Fall2002

Spring2003

Fall2003

Spring2004

Fall2004

Spring2005

Fall2005

Spring2006

Fall2006

Spring2007

Fall2007

Spring2008

Fall2008

Spring2009

Fall2009

Spring2010

Fall2010

Spring2011

Fall2011

Spring2012

Fall2012

Spring2013

Fall2013

Spring2014

Fall2014

Spring2015

Fall2015

2016 2017 2018 201

Rent Comparables Data - 1/7/2016 - Page 1 of 2This information is from our surveys for The Apartment Vacancy Report, B) Copyright by Dupre + Scott Apartment Advisors, Inc.

Vacancy Rate

MARKET FUNDAMENTALS URBAN KING

Mon

thly

Ren

t

Monthly Rent Vacancy Rate Units Delivered Units Planned

24,976 UNITS DELIVERED

2,696

4,060

5,155

Rent & Vacancy Data Provided by Dupre + ScottFor more comprehensive data, visit: www.duprescott.com

2015

2014

$1,845AVG RENT PER UNIT

$1,723AVG RENT PER UNIT

$2.45AVG RENT PER SF

$2.33AVG RENT PER SF

4.0%VACANCY

3.8%VACANCY

7.1% 5.2% 20 BP

Even with record delivery of new apartment units in Urban King in 2015, rental rates continue to rise while vacancy is stable at 4.0%. The quantum of delivery of new apartment units begins a massive ascension in 2016 with over 9,000 units planned for delivery. During 2017 2019 another 27,000 units are planned, with even more developments in early planning stages. The coming years will test the resilience of many neighborhoods within Urban King.

OUR MARKET INSIGHT

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Spring2000

Fall2000

Spring2001

Fall2001

Spring2002

Fall2002

Spring2003

Fall2003

Spring2004

Fall2004

Spring2005

Fall2005

Spring2006

Fall2006

Spring2007

Fall2007

Spring2008

Fall2008

Spring2009

Fall2009

Spring2010

Fall2010

Spring2011

Fall2011

Spring2012

Fall2012

Spring2013

Fall2013

Spring2014

Fall2014

Spring2015

Fall2015

2016 2017 2018 2019

1,046619

1,078 942 807 883

1,389

3,351

2,645

620

1,7172,111

6,449

5,155

9,05112,665 13,194

1,403

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

36,313UNITS PLANNED



URBA

N KI

NG

EMPLOYMENT GROWTHURBAN KING

*Due to incomplete employment data for Nov.-Dec. 2015, the existing data was annualized and trended by industry for the six different submarkets.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

JOB

S

15,798 JOBS2011

15,916 JOBS2012

21,351JOBS2013

16,022JOBS2014

YEAR-OVER-YEAR GROWTH

26,747JOBS2015

Construction/Manufacturing Retail/Service Trade/Transportation/Utilities Professional/STEM FIRE Education/Healthcare Government

STEM JOBGROWTH

18%IN LAST 4 YEARS

40% IN LAST 10 YEARS

23,734 RETAIL & SERVICES

1,870TRADE, TRANSPORATION &

UTILITIES

HOTTEST & COLDEST job growth in the last 3 years

In a recently published study data has shown that for every new Professional/STEM job, four more jobs are created. The current ratio for Urban King Professional/STEM jobs to all other jobs is 1:2.35 which is a signal to expect robust job creation in the other six job sectors in the near future.

OUR MARKET INSIGHT



URBAN KING

URBANKINGCOUNTY2014SALES

1940

1950

1960

1970

1980

1990

2000

2010

2020

$0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000

YearBuilt

SalePrice(PPU)

1940

1950

1960

1970

1980

1990

2000

2010

2020

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900

YearBuilt

SalePrice(PPSF)

2015 SALES & HISTORICAL SALES TRENDSURBAN KING

2000-2015 URBAN KING SALES TRENDS

$138 $150$172

$154 $163

$209

$269$311

$339

$213

$280

$326

$381

$437 $428

$529

$0

$100

$200

$300

$400

$500

$600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

SalePrice(PPSF)

Year

7.3% 7.3%7.0%

6.5%

5.7%

5.0% 5.0%4.5% 4.5%

5.8%

5.2% 5.2%4.8% 4.6% 4.5% 4.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

CapRate

Year

CustomApartmentInvestmentReport1/13/2016Page1of1Source:TheApartmentInvestmentReport,Copyright2006byDupre+ScottApartmentAdvisors,Inc.

2015 URBAN KING SALES METRICS



2015 Downtown Sales

Property Name Address Year Built Units NRSFAvg Unit

Size Price Sale Date $/Unit $/NRSFCap Rate

BuyerSeller

1 Premiere on Pine 815 Pine Street 2015 386 307,827 797 $243,350,000 7/9/2015 $623,974 $791 3.7%HeitmanHolland Partners

Average 2015 386 307,827 797 $243,350,000 $623,974 $791 3.7%

Seattle2nd Avenue Extension South

4th AvenueA

laskan Way S

outh 4th

Aven

ue S

outh

Denny Way

Elliott Avenue

2nd Avenue

Elliott Avenue West

WA 304

WA 305

Broa

d Stre

et

Alaskan Way

23rd

Ave

nue

Eas

t

Bro

adw

ay E

ast

East Union Street

East Cherry Street

East Yesler Way

23rd

Ave

nue

12th

Ave

nue

Sou

th

Broadw

ay

23rd Avenue South

East M

adison

Street

5th

Aven

ue S

outh

9th

Aven

ue N

orth

Wes

tlake

Ave

nue

Nor

th Fairview Avenue N

orth

Denny Way

Olive W

ay8th Avenue

Dex

ter A

venu

e

East

Oliv

e W

ay

Elliott Avenue

Pine S

treet

East Pike Street

Madis

on Str

eet

Pike S

treet

7th Avenue

6th Avenue

Yesler Way

James

Street

5th Avenue

3rd Avenue

Boren Avenue

1st Avenue

East Pine Street

Western Avenue

South Jackson Street

19th

Ave

nue

East Thomas Street

15th

Ave

nue

East Jefferson Street

11th Avenue

East Union Street

Boy

lsto

n Av

enue

Eas

t Harvard Avenue East

Bel

levu

e Av

enue

8th Avenue

Minor Avenue

12th Avenue East

12th Avenue

14th

Ave

nue

Sou

th

6th

Aven

ue S

outh

Virgin

ia St

reet

Terry Avenue

Leno

ra S

treet

Stew

art S

treet

Aur

ora

Aven

ue

9th Avenue

Taylor Avenue

Ceda

r Stre

et

Vine S

treet

2nd

Aven

ue N

orth

Elliott Avenue

Blan

char

d Stre

et

Western Avenue

John Street

South King Street

Madis

on Str

eetMa

rion Str

eet

Unive

rsity S

treet

Spring

Street

Terr

y Av

enue

Nor

th

Bro

adw

ay C

ourt

6th

Aven

ue N

orth

Pine S

treet

7th Avenue

East Pine Street

25th Avenue

24th

Ave

nue

22nd

Ave

nue

Sou

th

25th

Ave

nue

Sou

th

24th

Ave

nue

Sou

th

25th Avenue East24

th A

venu

e E

ast

22nd

Ave

nue

Eas

t

East Pike Street

East Marion Street

19th Avenue

19th

Ave

nue

Sou

th

18th

Ave

nue

Sou

th

20th

Ave

nue

Sou

th

21st

Ave

nue

Sou

th

17th Avenue

17th

Ave

nue

Sou

th

16th

Ave

nue

Sou

th

21st

Ave

nue

18th

Ave

nue

East Columbia Street

East John Court

13th Avenue East

East James Court

15th

Ave

nue

Sou

th

11th Avenue

10th

Ave

nue

14th

Ave

nue

Nagle P

lace

10th

Ave

nue

Eas

t

East James Street

East Union Street

Colum

bia Str

eet

East Denny Way

9th

Aven

ue S

outh

East Spruce Street

East Fir Street

7th

Aven

ue S

outh

East Alder Street

East John Street

Mel

rose

Ave

nue

Eas

t

Sum

mit

Aven

ue

9th Avenue

Belm

ont Avenue

Dillin

g Way

8th

Aven

ue N

orth

21st

Ave

nue

Eas

t

Bell S

treet

DOW

NTOW

N

1

2015

2014

$623.974AVG PRICE PER UNIT

$791AVG PRICE PER SF

3.7%CAP RATE

NO SALES NO SALES NO SALES

Premier on Pine set new sales records in the region, as well as a new precedent of a sub-4% cap rate transaction and pricing on a per-square-foot basis in excess of the regions condominium market.

OUR MARKET INSIGHT



Downtown Development Pipeline Deliveries2016 2017 2018 2019 FUTURE

591 2,138 1,174 1,040 3,8422016 2017 2018 2019 FUTURE

Numbers within circles on map below indicates number of units in each development.

DOWNTOW

N

Seattle2nd Avenue Extension South

4th AvenueA

laskan Way S

outh 4th

Aven

ue S

outh

Denny Way

Elliott Avenue

2nd Avenue

Elliott Avenue West

WA 304

WA 305

Broa

d Stre

et

Alaskan Way

23rd

Ave

nue

Eas

t

Bro

adw

ay E

ast

East Union Street

East Cherry Street

East Yesler Way

23rd

Ave

nue

12th

Ave

nue

Sou

th

Broadw

ay

23rd Avenue South

East M

adison

Street

5th

Aven

ue S

outh

9th

Aven

ue N

orth

Wes

tlake

Ave

nue

Nor

th Fairview Avenue N

orth

Denny Way

Olive W

ay8th Avenue

Dex

ter A

venu

e

East

Oliv

e W

ay

Elliott Avenue

Pine S

treet

East Pike Street

Madis

on Str

eet

Pike S

treet

7th Avenue

6th Avenue

Yesler Way

James

Street

5th Avenue

3rd Avenue

Boren Avenue

1st Avenue

East Pine Street

Western Avenue


19th

Ave

nue

East Thomas Street

15th

Ave

nue


11th Avenue

East Union Street

Boy

lsto

n Av

enue

Eas

t Harvard Avenue East

Bel

levu

e Av

enue

8th Avenue

Minor Avenue

12th Avenue East

12th Avenue

14th

Ave

nue

Sou

th

6th

Aven

ue S

outh

Virgin

ia St

reet

Terry Avenue

Leno

ra S

treet

Stew

art S

treet

Aur

ora

Aven

ue

9th Avenue

Taylor Avenue

Ceda

r Stre

et

Vine S

treet

2nd

Aven

ue N

orth

Elliott Avenue

Blan

char

d Stre

et

Western Avenue

John Street

South King Street

Madis

on Str

eetMa

rion Str

eet

Unive

rsity S

treet

Spring

Street

Terr

y Av

enue

Nor

th

Bro

adw

ay C

ourt

6th

Aven

ue N

orth

Pine S

treet

7th Avenue

East Pine Street

25th Avenue

24th

Ave

nue

22nd

Ave

nue

Sou

th

25th

Ave

nue

Sou

th

24th

Ave

nue

Sou

th

25th Avenue East24

th A

venu

e E

ast

22nd

Ave

nue

Eas

t

East Pike Street

East Marion Street

19th Avenue

19th

Ave

nue

Sou

th

18th

Ave

nue

Sou

th

20th

Ave

nue

Sou

th

21st

Ave

nue

Sou

th

17th Avenue

17th

Ave

nue

Sou

th

16th

Ave

nue

Sou

th

21st

Ave

nue

18th

Ave

nue


East John Court13th Avenue E

ast

East James Court

15th

Ave

nue

Sou

th

11th Avenue

10th

Ave

nue

14th

Ave

nue

Nagle P

lace

10th

Ave

nue

Eas

t

East James Street

East Union Street

Colum

bia Str

eet

East Denny Way

9th

Aven

ue S

outh

East Spruce Street

East Fir Street

7th

Aven

ue S

outh

East Alder Street

East John Street

Mel

rose

Ave

nue

Eas

t

Sum

mit

Aven

ue

9th Avenue

Belm

ont Avenue

Dillin

g Way

8th

Aven

ue N

orth

21st

Ave

nue

Eas

t

Bell S

treet

200

200

132

169

428

300

396

340

398

812

706686

550

840

5050

196

450

393

356154

447

372

160

*Indicates Micro. Indicates Possible Condo.

Downtowns development pipeline grew 55% since December 2014, with approximately 3,400 more units currently planned than a year ago. Notably, several new condominiums are currently under development downtown.

OUR MARKET INSIGHT



2015 South Downtown/ Pioneer Square Sales

Rainier Avenue South

South Dearborn Street

WA 304; WA 305

Railroad Way South

1st A

venu

e S

outh

4th Avenue


2nd Avenue

Ala

skan

Way

Sou

th

4th Avenue South

WA 304

WA 305

Seattle Boulevard South

Boren Avenue South

East Yesler Way

Bro

adw

ay


12th

Ave

nue

Sou

th

Jose Rizal Bridge

7th

Aven

ue S

outh

Airport Way South

5th

Aven

ue S

outh

Yesler Way

5th Avenue

3rd

Aven

ue S

outh

East

Fro

ntag

e R

oad

Sout

h

Boren Avenue

1st Avenue


East Yesler Way

8th Avenue9th Avenue

12th

Ave

nue

14th Avenue

Golf D

rive South

12th

Ave

nue

Sou

th

15th Avenue South6th

Ave

nue

Sou

th

2nd

Aven

ue S

outh

Western Avenue

South King Street


South Main Street

19th

Ave

nue

20th Avenue South

17th

Ave

nue

Sou

th

16th

Ave

nue


South Jackson Place

20th

Ave

nue

South N

orman S

treet

Sturgus Avenue South

13th Avenue

10th Avenue

10th

Ave

nue

Sou

th

15th

Ave

nue

9th Avenue South

East Spruce Street

8th

Aven

ue S

outh

South Addition Street

South Plummer StreetSou

th Charl

es Stree

t

7th

Aven

ue S

outh

South Main Street

May

nard

Ave

nue

Sou

th

Railroad Way South

South Washington Street

3rd Avenue South

South King Street

South Weller Street

S. D

OWNT

OWN/

PI

ONEE

R SQ

UARE

2015

2014

NO SALES

$118,421AVG PRICE PER UNIT

NO SALES


NO SALES

4.7%CAP RATE

The South Downtown and Pioneer Square market has a small inventory of market-rate apartments with little y-o-y transaction volume. Due to long-term ownership and historical status, few buildings trade or are re-developed, resulting in an absence of sales activity. With several new developments on the horizon and renewed investor interest in these markets, we expect the sales market to quicken its pace in coming years.

OUR MARKET INSIGHT



South Downtown/Pioneer Square Development Pipeline

Deliveries2016 2017 2018 2019 FUTURE

278 436 0 0 136

S. DOWNTOW

N/ PIONEER SQUARE



WA 304; WA 305

Railroad Way South

1st A

venu

e S

outh

4th Avenue


2nd Avenue

Ala

skan

Way

Sou

th

4th Avenue South

WA 304

WA 305


Boren Avenue South

East Yesler Way

Bro

adw

ay


12th

Ave

nue

Sou

th

Jose Rizal Bridge

7th

Aven

ue S

outh

Airport Way South

5th

Aven

ue S

outh

Yesler Way

5th Avenue

3rd

Aven

ue S

outh

East

Fro

ntag

e R

oad

Sout

h

Boren Avenue

1st Avenue


East Yesler Way


12th

Ave

nue

14th Avenue

Golf D

rive South

12th

Ave

nue

Sou

th

15th Avenue South6th

Ave

nue

Sou

th

2nd

Aven

ue S

outh

Western Avenue

South King Street


South Main Street

19th

Ave

nue

20th Avenue South

17th

Ave

nue

Sou

th

16th

Ave

nue


South Jackson Place

20th

Ave

nue

South N

orman S

treet

Sturgus Avenue South

13th Avenue

10th Avenue

10th

Ave

nue

Sou

th

15th

Ave

nue

9th Avenue South

East Spruce Street

8th

Aven

ue S

outh

South Addition Street

South Plummer StreetSou

th Charl

es Stree

t

7th

Aven

ue S

outh

South Main Street

May

nard

Ave

nue

Sou

th

Railroad Way South


3rd Avenue South

South King Street

South Weller Street

200 108

125

107

4540

89

82

54


Pioneer Square, as an urban neighborhood, is on the rise with a spate of new retailers and restaurants and a growing number of tech employers and tech incubators. Apartment developers are well-rewarded with rental rates reaching in excess of $3.20 SF.

OUR MARKET INSIGHT

2016 2017 2018 2019 FUTURE




2015 Capitol Hill Sales

SeattleSR

-99

SBA

uror

a Av

enue

Nor

th


15th

Ave

nue

Wes

t

4th Avenue

Edgar Martinez Drive South

Ala

skan

Way

Sou

th

Denny Way

2nd Avenue

Elliott Avenue West

WA 305

Alaskan Way

Mercer Street

24th

Ave

nue

Eas

t

10th

Ave

nue

Eas

t

23rd

Ave

nue

Eas

t

Bro

adw

ay E

ast

East Cherry Street

Mar

tin L

uthe

r Kin

g Ju

nior

Way

Bro

adw

ay

23rd

Ave

nue

Sou

th

East

Madis

on St

reet


9th

Aven

ue N

orth

Fairv

iew Av

enue

Nor

th

Denny Way

Olive W

ay8th Avenue East Pike Street

Mercer Street

Madis

on Str

eet

7th Avenue

Yesler Way

James

Street

5th Avenue

1st A

venu

e S

outh

1st Avenue

Western Avenue

Magnolia Bridge

Que

en A

nne

Aven

ue N

orth

1st A

venu

e N

orth


East Lynn Street

Madrona D

rive

34th

Ave

nue

32nd

Ave

nue

Eas

t

McG

ilvra

Bou

leva

rd E

ast

19th

Ave

nue

East Yesler Way

East Aloha Street 19th

Ave

nue

Eas

t

31st

Ave

nue

Sou

th


35th

Ave

nue

Sou

th

East Union Street

Har

vard

Ave

nue

Eas

t

12th

Ave

nue

Eas

t

Boston Street

West Olympic Place

West McGraw Street

Gilm

an Drive West

6th

Aven

ue W

est

Magnolia Boulevard West

41st

Ave

nue

Eas

t

East Helen Street

Maiden Lane East

35th

Ave

nue

Eas

t

31st

Ave

nue

36th

Ave

nue

33rd

Ave

nue

Sou

th29t

h Av

enue

Yaki

ma

Aven

ue S

outh

27th

Ave

nue

Eas

t28

th A

venu

e S

outh

29th

Ave

nue

Eas

t

25th

Ave

nue

26th

Ave

nue

Eas

t25

th A

venu

e E

ast

South Norman Street

East Crockett Street

Bel

mon

t Pla

ce E

ast

Har

vard

Ave

nue

Eas

t

East Denny Way

East Alder StreetB

ellevue Avenue East

21st

Ave

nue

Eas

t

South Weller Street

8th

Aven

ue N

orth

Galer Street

McGraw Street

Blaine Street

4th

Aven

ue W

est

West Lee Street

West Boston Street



BuyerSeller

1 Pearl 1500 E Madison Street 2008 80 54,680 668 $33,500,000 12/23/2015 $372,222 $613 4.0%Equity ResidentialJeff Brotman

2 19th & Mercer 526 19th Avenue E 2013 50 43,475 870 $25,150,000 12/15/2015 $449,107 $578 4.0% Washington Trust BankMeriwether Partners3 Sunset Electric 1111 E Pine Street 2014 92 63,013 664 $42,155,000 3/31/2015 $430,153 $633 4.4% ASB Real Estate InvestmentsWolff Company4 REO Flats 1525 14th Avenue 2013 108 75,459 699 $47,580,000 3/27/2015 $413,739 $631 4.6% ASB Real Estate InvestmentsMadrona Real Estate5 Pine+Minor 1519 Minor Avenue 2013 120 69,231 550 $43,000,000 2/26/2015 $358,333 $621 4.0% Pillar CommunitiesGerding Edlen

Average 2012 90 61,172 690 $38,277,000 $404,711 $615 4.2%

43

CAPI

TOL

HIL

L

2015

2014





4.2%CAP RATE

4.0%CAP RATE

29.1% 35.5% 20 BP

1

2

5

Capitol Hill remains a favorite neighborhood of developers, investors and renters alike. Sales in 2015 prove a massive up-tick in values as a result of the delivery of ultra-high quality buildings and strong investor demand. Prices on a per-unit and per-square foot basis are beginning to rival new condominium sales prices and high-rise development pricing metrics. Expect more marquee sales in 2016 and beyond.

OUR MARKET INSIGHT



Capitol Hill Development Pipeline

CAPITOL HILL


1,304 1,136 1,204 22 643*Indicates Micro. Indicates Possible Condo.

96

Denny Way

Mercer Street

10th

Ave

nue

Eas

t

23rd

Ave

nue

Eas

tTu

rner

Way

Eas

t

East

Roy S

treet

Lake Washington Boulevard EastB

road

way

Eas

t

East Union Street

23rd

Ave

nue

Bro

adw

ay

East M

adison

Street

Fairv

iew Av

enue

Nor

th

East Denny Way

Olive W

ay

8th Avenue

Stew

art S

treet

East O

live Wa

y

Pine S

treet

East Pike Street

Pike S

treet

7th Avenue

6th Avenue

Boren Avenue

Eas

tlake

Ave

nue

Eas

t

East Pine Street

Madrona D

rive

34th

Ave

nue

32nd

Ave

nue

McG

ilvra

Bou

leva

rd E

ast

Mar

tin L

uthe

r Kin

g Ju

nior

Way

19th

Ave

nue

East Thomas Street

15th

Ave

nue

Mar

tin L

uthe

r Kin

g Ju

nior

Way

Eas

t


Ave

nue

Eas

t

15th

Ave

nue

Eas

t

East John Street

Belmont Avenue East

11th

Ave

nue

East Union Street

Boy

lsto

n Av

enue

Eas

t

Harvard Avenue E

ast East Denny Way

Bel

levu

e Av

enue

Mel

rose

Ave

nue

12th

Ave

nue

Eas

t

12th Avenue

Howe

ll Stre

et

Lakeview B

oulevard East

Mercer Street

John Street

Republican Street

Seneca

Street

Bor

en A

venu

e N

orth

Min

or A

venu

e N

orth

Harrison Street

Bro

adw

ay C

ourt

Thomas Street

Washington Place East

East Helen Street

28th

Ave

nue

Eas

t

East

Arthu

r Plac

e

40th

Ave

nue

East Schubert Place

37th

Ave

nue

East Florence Court

Grand Avenue

37th

Ave

nue

Eas

t

36th

Ave

nue

Eas

t

35th

Ave

nue

34th

Ave

nue

Eas

t

36th

Ave

nue

33rd

Ave

nue

31st

Ave

nue

32nd

Ave

nue

31st

Ave

nue

Eas

t

30th

Ave

nue

Eas

t

39th Avenue East

Dew

ey P

lace

Eas

t30

th A

venu

e

29th

Ave

nue

27th

Ave

nue

27th

Ave

nue

Eas

t

East Pine Street

29th

Ave

nue

Eas

t

22nd

Ave

nue

26th

Ave

nue

26th Avenue East

25th

Ave

nue

Eas

t

24th

Ave

nue

Eas

t

22nd

Ave

nue

Eas

t

East Glen Street

18th

Ave

nue

Eas

t

17th

Ave

nue

Eas

t

20th

Ave

nue

Eas

t

16th

Ave

nue

Eas

t

East Spring Street 19th

Ave

nue

17th

Ave

nue

16th

Ave

nue

20th

Ave

nue

21st

Ave

nue

18th

Ave

nue

Fede

ral A

venu

e E

ast

East John Court

East Valley Street

Mal

den

Aven

ue E

ast

14th

Ave

nue

Eas

t

East Ward Street

13th

Ave

nue

Eas

t

11th

Ave

nue

Eas

t

11th Avenue

13th

Ave

nue

14th

Ave

nue

Nagle P

lace

Bro

adw

ay E

ast

East Aloha Street

East Harrison Street

10th

Ave

nue

Eas

t

East Mercer Street

East Thomas Street

East Prospect Street

Boylston Avenue H

arva

rd A

venu

e

Spring

Street

East Union Street

East Olive Street

East Howell Street

Har

vard

Ave

nue

Eas

t

East Denny Way

East Republican Street

Bellevu

e Court

East

Valley Street

Roy Street

East John Street

East Roy Street

East Loretta Place

Mel

rose

Ave

nue

Eas

t

Sum

mit Avenue

9th Avenue

Yale Avenue North

Terry Avenue

Belm

ont Avenue

21st

Ave

nue

Eas

t

221

51

5736

34

74

33*41

70

50

36

55*

3755

41

47

20

32

60

90

47

44

60

42*

65

43

44

89135

137100

170

100100

140

136

130

70 75

44

86

20

96 41105*

2016 2017 2018 2019 FUTURE


EAST SLO

PE OF CAPITOL HILL

64 52

503426

75*157160

95

38

144 4192

The emerging East Slope of Capitol Hill continues to take shape. Developers completed exceptional new apartment projects east of 18th Avenue as early as 2012 and now specific micro-markets are forming along E. Madison and the retail corridor of 23rd & Union. In 2016, several hundred units are set for delivery on Capitol Hills East Slope with additional projects slated for 2017 2019.

OUR MARKET INSIGHT

22

FUTU

RE L

INK

LIGH

T RA

IL



2015 First Hill/Yesler Terrace Sales



BuyerSeller

1 One Thousand 8th Avenue 1000 8th Avenue 1950 351 211,872 602 $99,500,000 6/30/2015 $283,476 $470 4.5%Sequoia EquitiesAcacia Capital

2 Barclay Broadway 412 Broadway Avenue 2012 118 81,494 639 $42,000,000 4/7/2015 $338,710 $515 4.2%Calfox IncGerding Edlen

Average 1981 235 146,683 621 $70,750,000 $311,093 $492 4.4%

Seattle

2nd Avenue Extension South

4th Avenue


2nd Avenue

Ala

skan

Way

Sou

th

4th

Aven

ue S

outh

WA 304

WA 305

Alaskan Way

East Union Street

Boren Avenue South

East Cherry Street

East Yesler Way

23rd

Ave

nue

12th

Ave

nue

Sou

th

Mar

tin L

uthe

r Kin

g Ju

nior

Way

Bro

adw

ay

23rd Avenue South

East M

adison

Street

Westlake Avenue

Olive W

ay

8th Avenue

Stew

art S

treet

Pine S

treet

East Pike Street

Madis

on Str

eet

Alaskan Way

Pike S

treet


Yesler Way

James

Street

5th Avenue3rd Avenue

Boren Avenue

1st Avenue

East Pine Street

34th

Ave

nue

32nd Avenue

East Cherry Street

19th

Ave

nue

15th Avenue

East Yesler Way

31st

Ave

nue

Sou

th


11th Avenue

East Union Street

Spruce

Street

Bel

levu

e Av

enue

Mel

rose

Ave

nue

7th AvenueJeff

erson

Street

8th Avenue

12th

Ave

nue

14th

Ave

nue

14th

Ave

nue

Sou

th

6th

Aven

ue S

outh

Virgin

ia St

reet

Terry Avenue

Leno

ra S

treetBe

ll Stre

et

Stew

art S

treet

9th Avenue

Batte

ry St

reet

Elliott Avenue

Blan

char

d Stre

et

Western Avenue

South King Street

Madiso

n Stree

t


Marion

Street

Colum

bia Str

eet

Univer

sity Str

eet

Spring

Street

Seneca

Street

Bro

adw

ay C

ourt

9th Avenue

Pike Place

Pine S

treet

34th

Ave

nue

32nd

Ave

nue

31st

Ave

nue

Sou

th

30th

Ave

nue

29th

Ave

nue

28th

Ave

nue


Temple P

lace

East Pine Street

25th

Ave

nue

24th

Ave

nue

26th

Ave

nue

Sou

th

22nd

Ave

nue

Sou

th22

nd A

venu

e

25th

Ave

nue

Sou

th

26th

Ave

nue

24th

Ave

nue

Sou

th

27th Avenue27th Avenue S

outh

East Pike Street

19th Avenue

17th

Ave

nue

South Jackson Place

20th

Ave

nue

21st

Ave

nue


15th

Ave

nue

Sou

th

11th Avenue

10th

Ave

nue

10th

Ave

nue

Sou

th

Nagle P

laceEast James Street

East Union Street

East Olive Street

Colum

bia Str

eetMarion

Street

9th Avenue South

East Spruce Street

East Fir Street

8th Avenue South7t

h Av

enue

Sou

th

South Main Street

East Alder Street

East Terrace Street

Sum

mit

Aven

ue

Hub

bell

Plac

e

Terry Avenue

Belm

ont Avenue

May

nard

Ave

nue

Sou

th


8th Avenue

South Weller Street

1

FIRS

T H

ILL/

YE

SLER

TER

RACE

2

2015

2014





4.4%CAP RATE

3.7%CAP RATE

0.5% 20.7% 70 BP

FUTURE

LINK LI

GHT RA

IL



First Hill/Yesler Terrace Development Pipeline


275 406 1,953 0 1,106

FIRST HILL/

YESLER TERRACE


Seattle

2nd Avenue Extension South

4th Avenue


2nd Avenue

Ala

skan

Way

Sou

th

4th

Aven

ue S

outh

WA 304

WA 305

Alaskan Way

East Union Street

Boren Avenue South

East Cherry Street

East Yesler Way

23rd

Ave

nue

12th

Ave

nue

Sou

th

Mar

tin L

uthe

r Kin

g Ju

nior

Way

Bro

adw

ay

23rd Avenue South

East M

adison

Street

Westlake Avenue

Olive W

ay

8th Avenue

Stew

art S

treet

Pine S

treet

East Pike Street

Madis

on Str

eet

Alaskan Way

Pike S

treet


Yesler Way

James

Street


Boren Avenue

1st Avenue

East Pine Street

34th

Ave

nue

32nd Avenue

East Cherry Street

19th

Ave

nue

15th Avenue

East Yesler Way

31st

Ave

nue

Sou

th


11th Avenue

East Union Street

Spruce

Street

Bel

levu

e Av

enue

Mel

rose

Ave

nue

7th Avenue

Jeffers

on Stre

et

8th Avenue

12th

Ave

nue

14th

Ave

nue

14th

Ave

nue

Sou

th

6th

Aven

ue S

outh

Virgin

ia St

reet

Terry Avenue

Leno

ra S

treetBe

ll Stre

et

Stew

art S

treet

9th Avenue

Batte

ry St

reet

Elliott Avenue

Blan

char

d Stre

et

Western Avenue

South King Street

Madiso

n Stree

t


Marion

Street

Colum

bia Str

eet

Univer

sity Str

eet

Spring

Street

Seneca

Street

Bro

adw

ay C

ourt

9th Avenue

Pike Place

Pine S

treet

34th

Ave

nue

32nd

Ave

nue

31st

Ave

nue

Sou

th

30th

Ave

nue

29th

Ave

nue

28th

Ave

nue


Temple P

lace

East Pine Street

25th

Ave

nue

24th

Ave

nue

26th

Ave

nue

Sou

th

22nd

Ave

nue

Sou

th22

nd A

venu

e

25th

Ave

nue

Sou

th

26th

Ave

nue

24th

Ave

nue

Sou

th

27th Avenue27th Avenue S

outh

East Pike Street

19th Avenue

17th

Ave

nue

South Jackson Place

20th

Ave

nue

21st

Ave

nue


15th

Ave

nue

Sou

th

11th Avenue

10th

Ave

nue

10th

Ave

nue

Sou

th

Nagle P

lace

East James Street

East Union Street

East Olive Street

Colum

bia Str

eetMarion

Street

9th Avenue South

East Spruce Street

East Fir Street

8th Avenue South7t

h Av

enue

Sou

th

South Main Street

East Alder Street

East Terrace Street

Sum

mit

Aven

ue

Hub

bell

Plac

e

Terry Avenue

Belm

ont Avenue

May

nard

Ave

nue

Sou

th


8th Avenue

South Weller Street

215 265

207

200

287

275

6090*

100

400

338329

74

As one of only five submarkets with zoning that permits high-rise development, developers are planning a significant number of high-rise apartment buildings across First Hill. Long-awaited Yesler Terrace will begin to take shape in 2016, anchoring the southern end of First Hill and further connecting the Central District with Downtown and South Downtown.

OUR MARKET INSIGHT

200

200

200

2016 2017 2018 2019 FUTURE


106194

FIRST HILL STREETCAR

In 2016, the First Hill Streetcar - with its Broadway Extension - will begin service. This light-rail line will connect Seattles Waterfront with the Pioneer Square and Yesler Terrace neighborhoods continuing to the Light Rail Station in Capitol Hill.

FUTURE LI

NK LIGHT

RAILTRANSIT UPDATE



2015 Belltown Sales



BuyerSeller

1 Verve 2720 4th Avenue 2014 161 120,000 678 $77,857,000 10/1/2015 $483,584 $649 4.2% Clarion PartnersHB Capital2 Dimension by Alta 225 Cedar Street 2014 298 238,400 646 $144,000,000 9/21/2015 $483,221 $604 4.2% HeitmanWood Partners3 Lenora (Marq 211) 211 Lenora Street 1999 107 76,125 640 $40,385,067 6/15/2015 $377,431 $531 ** CWS Capital PartnersUnico Partners4 Viktoria 1915 2nd Avenue 2014 249 180,993 701 $130,000,000 5/14/2015 $522,088 $718 4.0% TruAmerica MultifamilyGoodman Real Estate

Average 2010 204 153,880 666 $98,060,517 $466,581 $625 4.1%

**Sold Vacant

Seattle

4th Avenue

Denny Way

Elliott Avenue

2nd Avenue

Elliott Avenue West

Broa

d Stre

et

Alaskan Way

Bro

adw

ay E

ast

East Union Street

East Ja

mes W

ay East Cherry StreetBro

adw

ay

East M

adison

Street

9th

Aven

ue N

orth

Wes

tlake

Ave

nue

Nor

th

Fairv

iew

Ave

nue

Nor

th

East Denny Way

Westlake Avenue

Olive W

ay8th Avenue

Dex

ter A

venu

e

Stew

art S

treet

East O

live Wa

y

Elliott Avenue

Pine S

treet East Pike Street

Madis

on Str

eet

Pike S

treet


James

Street


Boren Avenue

1st Avenue

East Pine Street

Western Avenue

Que

en A

nne

Aven

ue N

orth

1st A

venu

e N

orth


East John Street

Boy

lsto

n Av

enue

Eas

t

East Denny Way

Bel

levu

e Av

enue

Mel

rose

Ave

nue

8th AvenueMinor Avenue

12th

Ave

nue

Howe

ll Stre

et

Virgin

ia St

reet

Terry Avenue

Leno

ra S

treet

Bell S

treet

Stew

art S

treet

Aur

ora

Aven

ue

9th Avenue

Taylor Avenue

Wall

Stre

et

Ceda

r Stre

et

Batte

ry St

reet

Vine S

treet

2nd

Aven

ue N

orth

Elliott Avenue

Blan

char

d Stre

et

Clay

Stre

et

Western Avenue

Madiso

n Stree

tMa

rion Str

eet

Colum

bia Str

eet

Univer

sity Str

eet

Spring

StreetSe

neca S

treet

Terr

y Av

enue

Nor

th

Pon

tius

Aven

ue N

orth

War

ren

Aven

ue N

orth

6th

Aven

ue N

orth

Vine S

treet

Pine S

treet

7th Avenue

East Spring Street

14th Avenue East

13th Avenue East

East James Court

East Barclay Court

Nagle P

lace


East Thomas Street

Boylston Avenue

Harvard Avenue

Spring

Street

East Union Street

East Olive Street

Colum

bia Str

eet

East Howell Street

East Denny Way

Marion

Street

East Spruce StreetAlde

r Stree

t East Alder Street

East John Street

Sum

mit Avenue

9th Avenue

Terry Avenue

Belm

ont Avenue

8th Avenue

Belm

ont Avenue East

8th

Aven

ue N

orth

Batte

ry St

reet

Bay S

treet

Bell S

treet

SeattleCenterBE

LLTO

WN

2015

2014





4.1%CAP RATE

4.4%CAP RATE

-17.1% -2.7% 30 BP

2

1

3

4

The story in Belltown is that of high-rise development and concomitant investment sales. Three of the four sales recorded in 2015 were of high-rise buildings, with a pricing stratosphere to match. The decline in average pricing as compared to 2014 is the result of the sale of two ultra-luxe high-rises in 2014 The Martin and Joseph Arnold Lofts. Given the quality of new development in Belltown, expect pricing to hold if not escalate.

OUR MARKET INSIGHT



Belltown Development Pipeline Deliveries2016 2017 2018 2019 FUTURE

552 464 1,542 0 2,089

BELLTOWN


Seattle

4th Avenue

Denny Way

Elliott Avenue

2nd Avenue

Elliott Avenue West

Broa

d Stre

et

Alaskan Way

Bro

adw

ay E

ast

East Union Street

East Ja

mes W

ay East Cherry StreetBro

adw

ay

East M

adison

Street

9th

Aven

ue N

orth

Wes

tlake

Ave

nue

Nor

th

Fairv

iew

Ave

nue

Nor

th

East Denny Way

Westlake Avenue

Olive W

ay8th Avenue

Dex

ter A

venu

e

Stew

art S

treet

East O

live Wa

y

Elliott Avenue

Pine S

treet East Pike Street

Madis

on Str

eet

Pike S

treet


James

Street


Boren Avenue

1st Avenue

East Pine Street

Western Avenue

Que

en A

nne

Aven

ue N

orth

1st A

venu

e N

orth


East John Street

Boy

lsto

n Av

enue

Eas

t

East Denny Way

Bel

levu

e Av

enue

Mel

rose

Ave

nue

8th AvenueMinor Avenue

12th

Ave

nue

Howe

ll Stre

et

Virgin

ia St

reet

Terry Avenue

Leno

ra S

treet

Bell S

treet

Stew

art S

treet

Aur

ora

Aven

ue

9th Avenue

Taylor Avenue

Wall

Stre

et

Ceda

r Stre

et

Batte

ry St

reet

Vine S

treet

2nd

Aven

ue N

orth

Elliott Avenue

Blan

char

d Stre

et

Clay

Stre

et

Western Avenue

Madiso

n Stree

tMa

rion Str

eet

Colum

bia Str

eet

Univer

sity Str

eet

Spring

StreetSe

neca S

treet

Terr

y Av

enue

Nor

th

Pon

tius

Aven

ue N

orth

War

ren

Aven

ue N

orth

6th

Aven

ue N

orth

Vine S

treet

Pine S

treet

7th Avenue

East Spring Street

14th Avenue East

13th Avenue East

East James Court

East Barclay Court

Nagle P

lace


East Thomas Street

Boylston Avenue

Harvard Avenue

Spring

Street

East Union Street

East Olive Street

Colum

bia Str

eet

East Howell Street

East Denny Way

Marion

Street

East Spruce StreetAlde

r Stree

t East Alder Street

East John Street

Sum

mit Avenue

9th Avenue

Terry Avenue

Belm

ont Avenue

8th Avenue

Belm

ont Avenue East

8th

Aven

ue N

orth

Batte

ry St

reet

Bay S

treet

Bell S

treet

SeattleCenter

20063

150

100

152

110

100

150196

400

433

372

314

384

310 300

394

339

83*

97

OUR MARKET INSIGHTBelltowns zoning and waterfront location provides an ideal opportunity for high-rise development. There are currently nine residential high-rise buildings each in excess of 300 units under development or proposal in Belltown.

2016 2017 2018 2019 FUTURE




2015 Queen Anne Sales



BuyerSeller

1 Aperture on Fifth 206 5th Avenue N 2014 106 67,594 654 $39,961,000 7/15/2015 $376,991 $591 4.1% Pillar CommunitiesL&P PartnersAverage 2014 106 67,594 654 $39,961,000 $376,991 $591 4.1%

Bal

lard

Brid

ge15

th A

venu

e W

est

SR-9

9 SB

Aur

ora

Aven

ue N

orth

25th

Ave

nue

Nor

thea

st

Northeast 45th Street

Mon

tlake

Bou

leva

rd N

orth

east

West Nickerson Street Nickerson Street

15th

Ave

nue

Wes

t

Denny Way

Elliott Avenue

2nd Avenue

Elliott Avenue West

Mercer Street

Northeast 55th

Street

Roo

seve

lt W

ay N

orth

east

15th

Ave

nue

Nor

thea

stEas

t Gre

en La

ke W

ay N

orth

5th Avenue Northeast

7th

Aven

ue N

orth

eastNorth 46th Street

Leary Avenue Northwest

Northwest 54th Stre

et Northwest Market Street

Leary Way Northwest

24th

Ave

nue

Eas

t

Har

vard

Ave

nue

Eas

tB

road

way

Eas

t

23rd

Ave

nue

East

Madis

on S

treet

Westlake Avenue N

orth

Roy Street

East Denny Way

Eas

tlake

Ave

nue

Eas

t

Magnolia Bridge

Gilm

an Avenue West

Que

en A

nne

Aven

ue N

orth

Sto

ne W

ay N

orth


Penny Drive

20th Avenue Northeast Northeast 41st Street

East Lynn Street

19th

Ave

nue

East Aloha Street

North

Pac

ific S

treet

North 56th Street

Bro

okly

n Av

enue

Nor

thea

st

East Denny Way

12th Avenue

North 65th Street

Wal

lingf

ord

Aven

ue N

orth

Valley Street

Boston Street

3rd

Aven

ue W

est

North 34th Street

Northwest 65th Street

Texa

s W

ay

31st Avenue West

7th

Aven

ue W

est

Illinios Avenue

11th

Ave

nue

Wes

t10

th A

venu

e W

est

Clis

e P

lace

Wes

t32

nd A

venu

e W

est

28th

Ave

nue

Wes

t

34th

Ave

nue

Wes

tWest Emerson Street


Harrison Street

5th

Aven

ue W

est

60th

Ave

nue

Nor

thea

st

41st

Ave

nue

Eas

t

28th

Ave

nue

Nor

thea

st

33rd

Ave

nue

Nor

thea

st

West approach bridge north (WABN)

22nd

Ave

nue

Nor

thea

st

39th

Ave

nue

Eas

t

26th Avenue

26th

Ave

nue

Eas

t


17th

Ave

nue

Nor

thea

st

2nd

Aven

ue N

orth

east

20th

Ave

nue

Eas

t

16th

Ave

nue

22nd

Ave

nue

Eas

t

14th

Ave

nue

10th

Ave

nue

Eas

t

Min

or A

venu

e E

ast

Fran

klin

Ave

nue

East

North 52nd Street

North 48th Street

Northwest 52nd Street

Lee Street

Blaine Street

Comstock Street

Pro

sch

Aven

ue W

est


Wha

lley

Pla

ce W

est

25th

Ave

nue

Wes

t

West Halladay Street

West Boston StreetWest Newton Street

West Cramer Street

40th Avenue West

45th

Ave

nue

Wes

t

28th

Ave

nue

Wes

t

30th

Ave

nue

Wes

t

1

QUEE

N AN

NE

2015

2014





4.1%CAP RATE

4.5%CAP RATE

6.2% 30.8% 40 BP

The lack of sales in Queen Anne is more a measure of inventory than investor demand. Traditionally a hard market to enter, few sales of 50 or more unit buildings occur each year. Recent development in Queen Anne has occurred on a smaller scale and with longer-term owners, including several institutions/REITs. As is demonstrated by sales that occur, pricing is on par with Urban Kings most expensive neighborhoods.

OUR MARKET INSIGHT



Queen Anne Development Pipeline Deliveries2016 2017 2018 2019 FUTURE

259 405 468 0 692

QUEEN ANNE


Bal

lard

Brid

ge15

th A

venu

e W

est

SR-9

9 SB

Aur

ora

Aven

ue N

orth

Mon

tlake

Bou

leva

rd N

orth

east

West Nickerson Street

Nickerson Street

15th

Ave

nue

Wes

t

Denny Way

Elliott Avenue West

Mercer Street

Roo

seve

lt W

ay N

orth

east

15th

Ave

nue

Nor

thea

st

Green

Lake W

ay No

rth

5th

Aven

ue N

orth

east

7th

Aven

ue N

orth

east

North 46th StreetNortheast 45th Street

North 39th Street

Northwest Leary Way

West Emerson Place

Leary Way Northwest

Unive

rsity

Brid

ge

24th

Ave

nue

Eas

t

10th

Ave

nue

Eas

t

23rd

Ave

nue

Eas

t

Bro

adw

ay E

ast

9th

Aven

ue N

orth

Queen An

ne Drive W

estlake Avenue North

Fairv

iew Av

enue

Nor

th

Roy Street

East Denny Way

Eas

tlake

Ave

nue

Eas

t

Magnolia Bridge

Gilm

an Avenue West

Que

en A

nne

Aven

ue N

orth

1st A

venu

e N

orth

Sto

ne W

ay N

orth

Mem

oria

l Way

Nor

thea

st

Wal

la W

alla

Roa

d N

orth

east

East Lynn Street

East Aloha Street

19th

Ave

nue

Eas

t

East Miller Street

North

Pac

ific S

treet

Bro

okly

n Av

enue

Nor

thea

st

North 43rd Street

North 40th Street

5th

Aven

ue N

orth

North 35th Street

Boston Street

West Roy Street

3rd Avenue West

2nd

Aven

ue N

orth

John Street

West Commodore Way

Texa

s W

ay

9th

Aven

ue W

est

8th

Aven

ue W

est

22nd

Ave

nue

Wes

t

31st Avenue West

West Barrett Street


West McGraw Street

Illinios Avenue

11th Avenue West

Gilm

an Drive West

Olympic W

ay West

West Howe Street

West Galer Street

West Hayes Street

28th

Ave

nue

Wes

t

6th

Aven

ue W

est

Wes

t Vie

wm

ont W

ay W

est

West Emerson Street


23rd

Ave

nue

Wes

t

4th

Aven

ue N

orth

east


East Gwinn Place

East Hamlin Street

East Denny Way

Boy

lsto

n Av

enue

Eas

t

East Lynn Street

East Louisa Street

East Garfield Street

Car

r Pla

ce N

orth

Bellevue Avenue E

ast

North 42nd Street

North 51st StreetNorthwest 52nd Street


8th

Aven

ue N

orth

Hayes Street

Galer Street

Armour Street

Howe Street

Prospect Street

Aloha Street

4th

Aven

ue W

est

Pro

sch

Aven

ue W

est

West Prospect Street

West Lee Street

North 41st Street

West Halladay Street

26th

Ave

nue

Wes

t

West Boston Street

24th

Ave

nue

Wes

t

Ore

gon

Aven

ue

West Roberts W

ay

39th

Ave

nue

Wes

t44th

Ave

nue

Wes

t

46th

Ave

nue

Wes

t

West Dravus Street

West Lawton Street

232

20

79

20

37

677

45

6692

97

59

100

182

150

7940

34

173

75

161

As one of the Citys most desirable neighborhoods, Queen Anne is predominantly occupied by single family homes and an inventory of old-stock apartment buildings. Development sites are highly coveted and developers are rewarded with high rental rates and stable vacancy despite the delivery of an increasing number of apartment buildings.

OUR MARKET INSIGHT

2016 2017 2018 2019 FUTURE


FUTU

RE L

INK

LIGH

T RA

IL



2015 South Lake Union Sales



BuyerSeller

1 Summit at Lake Union 1735 Dexter Ave N 1995 150 109,585 750 $48,455,000 10/15/2015 $323,033 $442 4.8%Ezralow CompanyEquity Residential

2 Oakwood Seattle SLU 717 Dexter Avenue N 2013 100 67,400 674 $41,000,000 7/29/2015 $410,000 $608 4.0%Mesirow FinancialHolland Partners

3 Union SLU 905 Dexter Avenue N 2013 284 200,032 695 $112,300,000 6/19/2015 $395,423 $561 4.0% TIAA-CREFHolland Partners4 Alley 24 223 Yale Avenue N 2006 172 128,788 720 $58,200,000 2/20/2015 $338,372 $452 4.2% GreystarVulcan Real Estate5 Stack House 1280 Harrison Streeet 2013 278 219,972 760 $126,000,000 2/13/2015 $453,237 $573 4.0% JP Morgan Asset ManagementVulcan Real Estate6 Rollin Street Flats 120 Westlake Ave N 2009 208 237,911 1,059 $138,203,000 2/9/2015 $664,438 $581 4.7% Stockbridge Capital GroupVulcan Real Estate

Average 2008 199 155,442 776 $87,359,667 $430,750 $552 4.3%

Seattle

SR-9

9 SB

Aur

ora

Aven

ue N

orth


15th

Ave

nue

Wes

t

4th Avenue

Edgar Martinez Drive South

Ala

skan

Way

Sou

th

Denny Way

2nd Avenue

Elliott Avenue West

WA 305

Alaskan Way

Mercer Street

24th

Ave

nue

Eas

t

10th

Ave

nue

Eas

t

23rd

Ave

nue

Eas

t

Bro

adw

ay E

ast

East Cherry Street

Mar

tin L

uthe

r Kin

g Ju

nior

Way

Bro

adw

ay

23rd

Ave

nue

Sou

th

East

Madis

on St

reet


9th

Aven

ue N

orth

Fairv

iew Av

enue

Nor

th

Denny Way

Olive W

ay8th Avenue East Pike Street

Mercer Street

Madis

on Str

eet

7th Avenue

Yesler Way

James

Street

5th Avenue

1st A

venu

e S

outh

1st Avenue

Western Avenue

Magnolia Bridge

Que

en A

nne

Aven

ue N

orth

1st A

venu

e N

orth


East Lynn Street

Madrona D

rive

34th

Ave

nue

32nd

Ave

nue

Eas

t

McG

ilvra

Bou

leva

rd E

ast

19th

Ave

nue

East Yesler Way


Ave

nue

Eas

t

31st

Ave

nue

Sou

th


35th

Ave

nue

Sou

th

East Union Street

Har

vard

Ave

nue

Eas

t

12th

Ave

nue

Eas

t

Boston Street

West Olympic Place

West McGraw Street

Gilm

an Drive West

6th

Aven

ue W

est


41st

Ave

nue

Eas

t

East Helen Street

Maiden Lane East

35th

Ave

nue

Eas

t

31st

Ave

nue

36th

Ave

nue

33rd

Ave

nue

Sou

th29t

h Av

enue

Yaki

ma

Aven

ue S

outh

27th

Ave

nue

Eas

t28

th A

venu

e S

outh

29th

Ave

nue

Eas

t

25th

Ave

nue

26th

Ave

nue

Eas

t25

th A

venu

e E

ast

South Norman Street


Bel

mon

t Pla

ce E

ast

Har

vard

Ave

nue

Eas

t

East Denny Way

East Alder Street

Bellevue Avenue E

ast

21st

Ave

nue

Eas

t

South Weller Street

8th

Aven

ue N

orth

Galer Street

McGraw Street

Blaine Street

4th

Aven

ue W

est

West Lee Street

West Boston Street

SOUT

H LA

KE U

NION

2015

2014





4.3%CAP RATE

4.9%CAP RATE

40.2% 30.6% 60 BP

1

23

4

5

6

South Lake Union was one of the most active investment sales neighborhoods in 2015. Of the sales that occurred, half closed well in excess of $100M and all six sales involved only three selling entities. The desire of major financial institutions to own apartment assets in Seattles urban core is exemplified by these sales. Given a development pipeline of over 13,000 units in South Lake Union, expect a volume of transactions in the coming years.

OUR MARKET INSIGHT



South Lake Union Development Pipeline


1,650 1,910 4,140 0 5,433 SOUTH LAKE UNION


51

SR-9

9 N

BA

uror

a Av

enue

Nor

th

4th Avenue

Denny Way

2nd Avenue

Elliott Avenue West

Broa

d Stre

et

Alaskan Way

Western Avenue West

Mercer Street

10th

Ave

nue

Eas

t

East

Roy S

2016 seattle apartment market study

Documents