Supply dropping off is starting to pay dividends for multifamily landlords in Seattle, Washington.
Most notably, net absorption, often used in CRE to estimate demand, surged by 34.46 percent year-over-year in the first quarter to 4,690 units, according to a report from Kidder Mathews.
Additionally, it was a strong quarter for multifamily sales, as the average price went up by 22.39 percent to $262,616. The top purchase went to Fairfield Residential, which paid $147 million for a 321-unit property in Downtown Redmond. Oro Capital Advisors and Vital Housing, et al. followed with 230-unit and 211-unit acquisitions for $40.75 million and $31.75 million, respectively.
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Rents increased by a modest 1.63 percent to an average of $1,995. The median price of a studio was $1,547, while three bedrooms, which were the largest number of units recorded in the report, averaged $2,557.
The strong quarter comes as units under construction plunged by nearly 43 percent to 18,593. Also, that's down by almost 3,000 units from the fourth quarter. The two largest projects currently are located in the Denny Triangle submarkets, with 1,130 and 1,050 units set to deliver in the fourth and second quarters, respectively.
Meanwhile, vacancy was a little more mixed. Year-over-year, the category ticked up by 30 basis points to 7.3 percent, but quarter-on-quarter, the rate was down by 10 basis points.
Cap rates spiked by 50 basis points year-over-year, at 5.7 percent.
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Anthony Russo
Anthony Russo has been contributing to GlobeSt. since July 2024. Along with CRE, his financial background expands to capital markets, the economy, and consumer issues. Previously, he has written for CapitalWatch and was a senior reporter for The US Sun.
