Seattle Retail Investment Hits Three-Year High
Retail demand for the first quarter in Seattle, Washington, was strong in the first quarter.
A couple of areas particularly saw major improvement — one of which was sales investment volume, which reached $371.7 million, according to a market report from CBRE. That's the highest number recorded since the third quarter of 2022. Also, the average deal price of $471 per square foot was 2.5 times more than the previous three months.
The two largest deals were both in the Tacoma submarket. Phillips Edison & Co. (REIT) paid $37 million for a 138,768-square-foot property, while Rosen-Harbottle CRE spent $36.75 million on a 140,240-square-foot property. J & I Power Equipment was the next closest, with its $14 million acquisition of a 79,946-square-foot asset in Lacey.
Another notable category was net absorption, which flipped to positive territory at 33,000 square feet compared with the -49,000 square feet posted in the fourth quarter. Additionally, CBRE added that "this marks the first quarter of positive net absorption since Q3 2023." The positive absorption was led by lifestyle, malls, neighborhood, community and strip centers, which combined for +124,000 square feet.
To the more underwhelming retail fundamentals in Seattle, asking rents were one of them. While the category was up by five cents to an average of $23.97 per square foot from the fourth quarter, the figure represented a 29-cent drop from the 12 months prior.
Also, availability dipped 10 basis points quarter-over-quarter to three percent — but remains elevated from the 2.9 percent five-year average.
Meanwhile, construction is slowing, as just 5,200 square feet of the 27,900 square feet in the past 12 months was delivered in the first quarter. Retail landlords in Seattle will hope that trend will lead to a stronger second quarter.
Source: GlobeSt/ALM