X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SEATTLE, WA-Since President Eisenhower got the ball rolling on the interstate highway system in the 1950s, Puget Sound-area development has followed, spreading out along the routes in a quest for bare and inexpensive ground. Now, however, with the highways choked with traffic and the cost of building suburban infrastructure soaring, the trend appears to be reversing.

“The highway system allowed easy access to cheap land. So, people abandoned the cities for the suburbs,” says Jack Rader, a man who has developed commercial real estate here since the 1970s and now manages CenterPoint Corporate Park in Kent. The suburban population growth has far surpassed the highway system’s ability to manage it efficiently, however, causing problems for commuters and ground transportation companies and generating renewed interest in urban living.

Land costs were what drew development out of the urban core, and they are now a major factor in pushing it back, says Rader, “The cost of building out infrastructure on new dirt (in suburban areas) is very expensive,” says Rader. “For example, out of what is spent developing in areas like Redmond and Woodinville (in the Eastside sub-market), the portion spent on mitigation fees is somewhere in the 25% to 35% range. What you’re going to see more and more is a push to make more efficient use of our land resources.” And that means moving development back toward the urban cores.

A prime example is the gentrification of Downtown Seattle’s Belltown neighborhood where developers are creating “live, work, play environments.” Though sales prices in the high-density residential projects are bumping around the $1,000 per sf mark, many who can afford it are exchanging their cash for convenience.

As for office development, although the city has been struggling to maintain its industrial focus, Rader expects the Sodo neighborhood near Safeco Field will eventually be filled with mid-rise office buildings. “It’s the best use of that land, and it’s going to be cheaper there than to take a project out to Snoqualmie (well east of Seattle) and pay for the infrastructure and mitigation costs.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. Apartments 2020Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.