By Jack Stubbs
There has been no shortage of development and construction activity in downtown Seattle in recent months, and a new 370-unit condominium project in Belltown broke ground today.
On Tuesday, June 19th, Walnut Creek, California-based Laconia Development celebrated the groundbreaking of a 41-story tower with its project partner, China-based Vanke, the country’s largest homebuilder. The groundbreaking was attended by representatives from the city of Seattle, the Downtown Seattle Association and non-profit Washington State China Relations Council.
The plans for the condominium project, named Spire, were officially announced in May 2016 and the tower is scheduled for occupancy in Fall 2020. The tower is located at 600 Wall St. on a small triangular site in Belltown, and along with 370 condominium units will also include 266 parking stalls. The project will provide a mix of studio, one-, two- and three-bedroom-plus-dent units. The unit types range from 520 to 3,000 square feet, with prices ranging from below $450,000 to $5 million. Realogics Sotheby’s International Realty will market the condos for sale.
The project team includes VIA Architecture (architect), Robin Chell Design (interior designer) and PCL Construction (contractor), as well as San Francisco-based Parkworks, who designed the automated parking system included in the project.
Some of the in-unit features include hardwood flooring, balconies and terraces in some units, integrated home technology and large-scale windows, which will provide views of the Space Needle and the Olympic Mountains.
The groundbreaking marks the latest chapter for Spire, which has been in the works for several years now. In October 2016, Vanke and Laconia acquired the 10,665 square foot development site for $19.25 million as part of a joint venture. Spire is Vanke’s first investment in the Seattle market and the company’s first ever investment with Laconia.
Laconia also developed the 31-story, 337-unit Cielo property in Seattle’s First Hill neighborhood, a project that opened in 2015. And the developer’s decision to build Spire as a condo project rather than as a for-rent property was in part dictated by the current market conditions of Seattle, according to CEO Paul Menzies. “We decided to built the project not as for-rent but as a condo project because of the dynamism of Seattle and the few available opportunities for home ownership,” he said.
Realogics’ president and CEO Dean Jones thinks that Spire’s provision of condo comes at the right time for Seattle’s residential market, and also reflects broader trends in terms of the preference of people looking to locate in Seattle. “We are in great need for added supply of condominiums…the second half of 2017 evidenced a paradigm shift in consumer trending from renting to buying,” he said. Jones thinks that rising rental rates across the board mean that people looking to locate in Seattle are beginning to see home ownership as a more viable option in a booming market. “It would seems that renters are increasingly positioning themselves for capital appreciation, mortgage interest rate deductions and attainable home ownership options before being priced out by rising prices and increasing interest rates,” he said.
Jones thinks that, at this point in the cycle, the time is right to be delivering condominiums to the growing Seattle market. “There will be more than 30,000 multifamily housing units delivered here in downtown Seattle in the current decade…but 91 percent of that supply was purpose-built for rent and not for individual home-ownership…that has been a rental cycle and that is changing here and now,” he said. “Given the lack of for-sale inventory, downtown Seattle is one of the most positive condo markets in the U.S.”
According to a first quarter 2018 condo report written by Realogics, the average days on the market for condo units in Seattle the first quarter of this year was 15 days, a figure that is down 34.8 percent from first quarter 2017. The average price-per-square-foot for condos in Seattle increased by 17 percent, from roughly $501 in 2017 to $587 in first quarter 2018.
And according to a study that O’Connor Consulting Group of Seattle conducted for Realogics, apartment demand in Snohomish and King counties fell by about 4,500 units in second half of 2017. There was also an increase of single-family condo sales in the two counties over the last couple of years: 40,000 homes closed in 2016, while more than 45,000 homes closed in 2017. According to the study, the downtown Seattle submarket delivered approximately 14,000 new housing units since 2010 and another 14,000 are expected to deliver by 2020, but only 10 percent of this total supply is likely to be offered for ownership.