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Waterfront property carries a significant premium in Seattle…which makes it a prime target for city taxes

  • This Snapshot acts as a companion piece to a Snapshot released November, 6th 2017 which outlined the potential benefits office landlords could see after the Seattle waterfront was redeveloped according to the City of Seattle. This got us thinking about what the value of the waterfront is currently to office landlords.

  • The map on the left shows the seven key developments funded by the local improvement district tax (LID) which is shaded in grey. Every commercial real estate building located in the LID Study Area will be subject to a tax to raise a flat $200 million dollars to fund the seven waterfront developments proposed by the City.

  • We studied the historical rental rates of all 179 office buildings in the waterfront LID zone  from 2000 to 2017 and compared those rents to all office buildings outside the LID zone. After controlling for building quality, time period and location, we found that these 179 waterfront buildings saw an additional $5.27 per square foot as compared to other, non-waterfront office buildings​

  • This rent premium is significant and will likely grow in the future as older leases tied to traditional office users transition over to high profit margin industries like technology/software firms. Does this mean that  Seattle waterfront property will be used as a source of funding even after the waterfront is redeveloped? ​

Sources: Waterfront Seattle, 2017; Valbridge Property Advisors, 2017; JLL Research​

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