By Meghan Hall
The spread and impact of COVID-19 has already hit the commercial real estate sector; according to many experts, transactions—both leasing and sales—have slowed. However, the sales team over at NEXUS, a 41-story condominium building located in downtown Seattle, is confident that their rate of sales will remain strong over the coming months, even as the economy continues to roil in the face of a global pandemic. As of April 2nd, NEXUS has closed 180 transactions and over 50 percent of presales in just 45 days, and the sales team expects the remainder of home purchases to close by the end of May.
“Owning a home has a new meaning now; it is your safe space,” said Erik Mehr, NEXUS’ lead broker. “I think things may slow a little bit, but I don’t see things dramatically changing.”
In the spring of 2017, Skanska signed a $151.6 million contract with Burrard Development to construct the building. Weber Thompson, a Seattle-based firm, is the project’s architect. In all, there are some 359 units. Two amenity spaces totaling nearly 20,000 square feet feature a fitness center, co-working spaces, a media facility, outdoor patio and fireside lounge, among other amenities. Units range in size from studios to three-bedroom homes, with pricing starting in the mid-$400,000s, but averaging around $615,000 per unit.
The design of the tower is recognizable for its stacked and rotated glass boxes, which provide an illusion of movement across the exterior of the building. Deep reveals create more depth and also serve as wrap-around terraces for the building.
“I think [the sales] are just a testament to the unique quality of the building and the unique amenities it offers, and its styling,” explained Mehr. “It is the newest building to be completed and come to market, so it has the advantage of having the most current amenity package that I think really fits the current demographic.”
The development, in addition to high-tech professionals, has also attracted business professionals, downsizers and investors. Residents who had closed deals began moving in around mid-February.
“We’re delighted to start the process of welcoming all of our residents to their beautiful new homes at NEXUS,” said Christian Chan, Chief Executive Officer, Burrard Properties in a statement at the time. “Our vision was to challenge the status quo and create a transformative new community that will elevate the urban living experience in downtown Seattle. We’re confident we’ve achieved that with NEXUS through thoughtful planning by the industry’s best, resulting in striking architecture, luxurious interiors, state-of-the-art technology and world-class amenities for our homeowners.”
The sales team’s outlook on future closings seems positive when compared to recent industry talk surrounding levels of unemployment and a lack of discretionary spending. However, condominium fundamentals, particularly in downtown Seattle have been extremely strong, and NEXUS has been able to ride that momentum. According to Mehr, there are only about 130 condominium units on the market, and during the first quarter, about 155 units closed, excluding NEXUS.
“That’s not even two months’ supply,” Mehr said. “For the most part, I feel like the folks that we have been talking with are part of the technology-driven economy where their jobs aren’t in jeopardy, and they still want to own a home.”
High demand for a limited supply bodes well for condominium units coming to market.
“The one thing about that is we just don’t have an abundance of inventory,” added Mehr. “It is such a radically different situation than what we faced ten years ago during the Great Recession. “Demand is still high enough because supply is just so low.”
While shelter-in-place orders have made the traditional face-to-face process more difficult, admitted Mehr, the brokerage team is still getting calls from interested buyers with the hopes of scheduling a tour. In addition to limited appointment tours, the brokers have been walking potential buyers through the website and virtual unit tours.
“It does make it much more difficult, because people want to see things in person,” said Mehr. However, the team’s optimism remains, and they hope to close between 20 and 25 sales per week moving forward.