Seattle’s apartment market has been hot, with new construction popping up everywhere and more cranes in the skyline than anywhere else in the United States but even with all this new construction and even more multifamily housing in the pipeline, could apartment buildings be struggling to fill their units? In a competitive market, it isn’t out of the ordinary for apartment buildings to offer move in incentives. Traditionally, management will offer one month free to new tenants but incentives beyond that could be a symptom of a larger problem in the market.
“It’s a sign that owners basically need to spend more money to attract more tenants and it hurts cash flow for the owners,” said Tom Cain with Apartment Insights Washington. “They’ve got to incentivize people to move in in the form of concessions or a typical one is first month free on a twelve month lease, that’s pretty standard.”
A quick search through Craigslist’s apartment and housing section in Seattle and you’ll see offers on units right and left. While most apartments are offering one month free rent, others are taking a more aggressive approach, offering a month free and then some.
Especially prominent in cities like Seattle, where zoning dictates whether or not buildings must require parking, one of the more popular incentives in the apartment market seems to include free parking. While many buildings don’t have to provide parking, the ones that do are capitalizing on it.
Latitude Apartments in Lower Queen Anne is offering six months free parking when you rent their top floor one-bedroom unit. The going rate for the unit is $2,075 per month but factor in the six months free parking and you’ll rack up $1,050 ($175 per month value) in savings. However, the savings offered are actually less than the traditional offering of one month free rent but the potential for free parking is enticing, especially in that neighborhood where street parking is limited.
But Latitude isn’t the only Queen Anne apartment to offer parking as a move-in incentive. Another building in Queen Anne, The Bernard, is offering a reduced security deposit of $99 and up to six months of free parking for select units.
In neighborhoods such as Wallingford and Greenlake, where street parking isn’t as hard to find, management is taking a different approach by offering extra amenities. LIV Wallingford, a new apartment building on 45th and Stone Way N., is offering an impressive deal for new residents. The offer includes two months free rent, a $500 Amazon gift card and free storage for six months ($25 per month value).
Nearby Green Lake Village is also offering up a mix of incentives for new tenants. Sign a lease and you’ll get a free Amazon Echo plus a $300 gift card and one month free. While the deal doesn’t apply to all units across the board, one select unit is eligible for the full package deal while all units qualify for one month free rent and two other units also qualify for the $300 gift card.
A spokesperson for Green Lake Village said the reason for the offering is because of the length the apartments have been on the market. It’s important to note that many apartments are offering incentives for specific units, rather than the whole building.
But according to a Seattle Apartment Market Study from Colliers’ Seattle Multifamily Team, vacancy rates aren’t on par with the growth the neighborhoods are experiencing. “Despite the rapid rental rate growth, vacancy rates in Greenlake, Wallingford and Fremont remain at 4 percent,” according to the report.
Greenlake Studio is offering two months free on new studio apartments, Stack House Apartments in South Lake Union is offering 3 months free parking for a top floor studio unit, and the Flats at Interbay is offering a free echo dot plus $200 off first month’s rent if you move in by March 10th.
In urban King, stretching from Greenlake all the way to West Seattle, there are 54,768 units in the pipeline, according to the report. Next year is shaping up to be one of the busiest yet, with 17,069 units expected just in the urban King area.
Queen Anne has averaged 368 new units each year since 2012, with above market rent growth and below market vacancy. Nearly half of the development pipeline in Queen Anne (1,742 units) is expected to deliver this year. Researchers with the multifamily team believe the addition of the Expedia headquarters to the Interbay area will bring in plenty of demand to absorb the new supply. “New buildings in Queen Anne carry a significant premium and will likely continue to do so given employment growth and urban-amenity growth within Queen Anne and on nearly every side of this hot urban neighborhood,” states the report.