At the February Northwest Chapter CCIM meeting, the topic was on tertiary market updates in Washington state. Three regional experts were selected to speak on behalf of their local markets (TriCities, Spokane, and NW WA). Amia was asked to represent the NW Washington market. Here is a summary of the discussion:
Derrick Stricker, CCIM | StrickerCRE, who will address the TriCities/Yakima market
Chris Bornhoft, CCIM | Bornhoft Commercial, the Spokane market, and
Amia Froese, CCIM | Saratoga Commercial, covering NW WA/Bellingham market
*All three panelists are the owners/designated brokers of their firms.
Summary of topics discussed:
What is the population growth in your area? What is drawing this expanding population?
Bellingham: 100k and growing, quality of life is consistently a draw to the area
Tri-cities: 350k and growing, city collaboration and incentives to draw people and businesses
Spokane: 500k and growing, quality of life and low cost of living. A lot of the influx is coming from Seattle
What are the hottest sectors in your market (e.g. Multifamily, office, warehouse/distribution/retail)?
And how does the Supply/Demand equation look and what is the effect.
Bellingham: Industrial, multifamily, and office has been surprisingly busy. Unlike larger markets like Seattle, we saw a decrease in office vacancy during and after the Pandemic. We attribute much of this to corporations opening PNW divisions in markets that provide better quality of life for their employees (less traffic, good schools, outdoor amenities, etc.)
Tri-cities: Industrial and multifamily
Spokane: Industrial and multifamily
Are developers in your market coming from the local community or from regional/national groups?
Bellingham: We tend to see much of our multi-family and mixed-use development projects completed by local developers. That being said, outside developers like large NW regional groups have been attracted to the area and taking on development projects in the student and workforce housing needs. We have also had interest from REITs in the multifamily sector.
Tri-cities: All three cities are collaborating and providing incentives to developers (both locally and regionally/nationally) to further expand
Spokane: Spokane has a large component of outside, regional and national developers
If from outside the area, are they welcomed or resented?
Bellingham: Outsider developers have to ‘prove’ themselves in the community as they are often viewed with some skepticism. Bellingham is very ‘local’ centric and has been somewhat resistant to growth from the community and from the City and County
What are we seeing with rental rates?
All three regions had similar answers in regards to rent:
Significant increase in industrial rates in recent years
Multi-family has increased approaching market plateau when supply begins to catch up with demand.
Retail and office have remained stable but with Landlords offering more in concessions to entice/attract credit tenants.
Geography of growth in these sectors and is there enough land available for the growth and development?
Bellingham: Bulk of growth being seen in urban village overlays to promote density versus sprawl. Opportunity zones have also attracted additional investors and development. Urban Village zoning offers revisions such as increased height limits, reduced parking requirements as well as city incentives on taxes.
Tri-cities: The cities are working together to create unique attractions between the three cities. Special focus is being given to the waterfront along the river.
Spokane: The growth areas of the city are facing stormwater challenges. The City is having to work on solutions to make development easier in these areas.
What is the weakest sector in your market?
Bellingham: Large retail
Tri-cities: Office, retail
Spokane: Office, retail
What is over saturated in the market?
All three regions stated that there is no new office buildings being developed (*medical-office buildings being the exception), no large retail
The Washington State CCIM Chapter is a privately incorporated chapter of the CCIM Institute. The chapter is one of a network of more than 50 chapters across the United States dedicated to improving benefits to CCIM members and increasing their involvement in the CCIM Institute.
The Washington State CCIM Chapter encompasses the State of Washington as well as Northern Idaho and has nearly 200 members from various real estate and real estate-related firms. Our chapter provides its members with the best in networking opportunities, designation promotion, candidacy guidance, and educational opportunities.
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