Just when it looked like the construction surge couldn’t get any busier, developers keep building more apartments and offices.
The demand for new housing and offices in Seattle’s core somehow keeps getting stronger, as the greater downtown region hits another record for construction.
There are 74 major projects getting built from South Lake Union to Sodo, the most since the Downtown Seattle Association began tracking construction in 2005, the organization said in a report issued Thursday.
The downtown group updates the region’s construction totals twice a year. A year ago, the region reached a new record with 65 buildings under way. Then six months ago, the count increased again, to 68. (In addition to downtown, the report covers Lower Queen Anne, South Lake Union, Capitol and First hills, the International District and Sodo).
Are the jackhammering, closed sidewalks and roadblocks ever going to end? Probably not anytime soon.
Half of the projects under way now are scheduled to wrap up this year. But there are about 150 projects still in the pipeline, and about one-third of those are ready to break ground soon.
Since it seems like streets have been getting torn up forever, it’s easy to forget how far the region’s development surge has come. The number of projects under way now is double the total from just five years ago. And it’s 60 percent more building than downtown saw at the peak of last decade’s boom, before the recession.
South Lake Union is still by far the hottest neighborhood, accounting for about one-third of the projects in the city’s core. Next are First Hill and the Denny Triangle, which each have about 15 percent of the developments. On the other end, the downtown waterfront, Sodo and the International Districts have the fewest projects.
What is everybody building, and why?
The short answer: apartments, because so many people are moving here and want to live downtown.
Two-thirds of the buildings under construction are residential towers, and while there are a couple of condo projects for homeownership included in the mix, the vast majority are apartments for rent. (Apartments are generally less risky for developers, and a more surefire moneymaker than condos right now.)
That breakdown hasn’t really changed from prior years. Despite record numbers of new apartments opening up citywide over the last few years, rents keep soaring as more people keep moving here with well-paying jobs. So developers have responded by building more and more and more.
In all, downtown has added 20,000 residential units in the last decade, with an additional 9,000 under construction and another 18,000 planned.
Virtually all of those new apartment towers are classified as luxury buildings, with rents about 40 percent higher than what’s charged in older buildings.
Across all building types, downtown Seattle rents now average nearly $2,400 a month, the most in King County. Under the conventional guide to spend 30 percent of income on housing, you’d need to make $96,000 a year to afford those rents.
But the rent hikes downtown have slowed somewhat in the past year as more apartments have opened up — inching up 2 percent over a year ago, far below the regionwide average. Almost 6,000 apartments are slated to open this year downtown, and nearly 9,000 citywide, both records — with even more expected later this decade.
Of course, the demand for apartments is largely the result of intense job growth driven by Amazon and other companies expanding downtown.
The report notes the greater downtown area has 5 million square feet of office getting built now, the equivalent of about two Empire State Buildings. That is down for the second year in a row, from the peak of 7.1 million square feet under construction in 2015.
Amazon is still taking up much of the new office space — it has 10 large offices recently completed, under construction now or about to get under way. Combined, those buildings will stand about 300 stories high. But builders have also begun constructing large new offices for Google and Facebook, and some without tenants lined up.
Developers built more office downtown in 2015 and 2016 than the previous five years combined.
If developers’ visions come true, they’ll hit a new peak for office construction downtown in 2019.
Lastly, the hotel resurgence continues, with a record 2,875 rooms under construction — with nearly half in R.C. Hedreen’s Hyatt Regency, which is set to be the largest hotel in the Pacific Northwest when it opens next to the Washington State Convention Center, scheduled for next year. That hotel alone has more rooms than were added downtown in the previous seven years combined.
At $400 million, the Hyatt is actually the second-biggest project under way now, behind the $450 million F5 Tower. The 58-story Rainier Square office and residential skyscraper, at $600 million, will soon be the biggest project downtown, when work begins later this year.
In all, $5 billion worth of construction permits were issued for projects under way now, up from the previous high of $4.2 billion in 2015, and an inflation-adjusted $2.9 billion in the peak before the recession.