REAL ESTATE NEWS

Getting employees back to in-person work is not only helping office — but across other CRE asset classes as well. Puget Sound's multifamily sector is a beneficiary of that trend.

The market during the second quarter absorbed 4,110 units, double the rate seen in the first quarter, according to a report from CBRE.

"Demand continues to be fueled by a return to office and tech expansion in the Eastside, reinforcing the fundamentals of the market despite interest rate volatility," the CRE firm explained.

While almost all other multifamily fundamentals in Puget Sound showed improvement, another important trend is low supply. Deliveries totaled 1,524 units in the second quarter, compared to 1,726 units in the previous three months.

Both strong demand and low supply are resulting in occupancy growth, according to CBRE. The latter category improved by 60 basis points to 95.9 percent.
Also, rents inched up by 1.4 percent to $2,236. To put that into context, it costs $5,720 on average per month to become a homeowner in Puget Sound, which is over two times more expensive than renting. That bodes favorably for multifamily in the area, thanks to affordability.

Investment activity was impressive as well. The $1.7 billion in sales volume marked a 211.2 percent surge from the previous three months. Soma Towers in Bellevue was the top property that traded, selling for a total of $192.85 million. The Danforth and Timbers at Issaquah Ridge ranked second and third, going for $173 million and $135.50 million, respectively.

Going forward, CBRE expects supply to continue its deceleration and investment appetite to remain strong as construction costs remain high in Puget Sound's multifamily sector.

"The overall market sentiment remains stable with continuous growth, as evidenced by a steady year-over-year rent increase and strong investor confidence in Seattle's long-term economic prospects," it said.

Source: GlobeSt/ALM