EDR Insight’s Market Confidence Index: SEATTLE

Growing market, strong forces driving growth and competitive pressures

In a market that one respondent characterized as “flooded with consultants and competition,” the Seattle market for due diligence is rising according to 51% of local environmental professionals.

“I still like the upside potential of markets like Seattle and Portland. They look like more affordable versions of San Francisco/San Jose to us.”

~local real estate investor

In the final installment of EDR Insight’s metro-specific market summaries, we are releasing the results from our Due Diligence at Dusk workshop on December 8th in Seattle. Below is a capsule summary of how local environmental professionals view Seattle, the market’s top challenges, clients’ aversion to risk and the near-term forecast.

The 4th Hottest Market in the U.S.   

Here are a few reasons why consultants working in the Seattle metro can be optimistic about business opportunities there in 2017:

  • Seattle is the 4th hottest market in the US for overall real estate prospects, behind only Austin, Dallas and Portland, according to the Urban Land Institute/PricewaterhouseCoopers Emerging Trends in Commercial Real Estate report 
  • The metro also made the ULI/PwC’s top 10 list for retail investment (3rd in the nation) and office (9th).
  • Technology-related sectors of the economy are still growing rapidly, and investors can expect another year of strong fundamentals.
  • Population growth in Seattle is projected to remain at nearly twice the national rate, driving demand for all classes of real estate.

EDR’s ScoreKeeper 3Q16 report reflects that Seattle, the 10th largest Phase I ESA market in the U.S., increased by 6 percent quarter-on-quarter, double the growth rate for the entire state of Washington over the same time period. Phase I ESA volume in nearby Portland, Oregon increased by a significant 18 percent in the third quarter over the corresponding quarter of 2015.

The results of EDR Insight’s Seattle Market Confidence Survey, conducted the week prior to DDD, characterize the market as follows:

  • 51% of area EPs view Seattle as a growing market for due diligence (21% characterize it as “rising quickly” and 30% as “growing slowly”)
  • A nearly equal percentage, or 49%, are experiencing a plateauing market, and none believe the market is declining.

“Business is expanding to more environmentally questionable sites.”

~ a local environmental professional

  • Lender clients are fairly averse to environmental risk, scoring a 3.27 on a scale from 1 (very tolerant of “red flags”) to 5 (very risk averse). Investor clients were slightly less averse at 2.67.
  • As was the case in the previous DDD in the Bay Area, Seattle EPs believe that their clients are significantly more sensitive to turnaround time than to Phase I ESA pricing.
  • Intense competition, pressure for fast delivery and pressure to lower price are viewed as the area’s top challenges.
  • Seattle consultants are confident about the local market outlook with a score of 3.79 on a scale from 1 (very pessimistic) to 5 (very optimistic).

Seattle Market Infographic

EDR Insight would like to thank all of our Seattle area consultants who participated in the survey, and congratulations to Golder’s Neil Gilham who was randomly selected for our free giveaway at the live event.

Happy New Year to all of our clients. We look forward to seeing you at a client event in the coming year!