Nothing travels faster than light, except for gossip. True enough, in the real estate industry, news travels fast, and we’ve heard a very plausible prediction from Redfin that “Amazon’s Big Plans for Bellevue Could Spur the Seattle Suburb Back Into a Real Estate Frenzy”. With the tech giant confirming reports that it will open a huge, shiny, new office in Bellevue, this doesn’t seem like “gossip fodder’” anymore. Where once they have remained quiet, Amazon is now open about leasing spaces in Bellevue and subleasing their acquired space in Seattle, which prompts people to think that Amazon is scaling back in its hometown and looking for space somewhere else. So fasten your seatbelts Bellevue, WA and get ready for changes brought about by Amazon’s dominant presence.
For many years, Seattle has always welcomed and rightfully capitalized on Amazon’s breakneck expansion projects that take up massive office spaces in the central business hub. Amazon has been buying office spaces left and right. It currently occupies a whopping 12 million square feet of office space in Seattle. This, in turn, has made the commercial real estate market in Seattle a hot industry. With Amazon committing to leasing the towering Rainier Square in Downtown Seattle, it looked like Amazon was preparing for Seattle domination.
According to GeekWire, Amazon scooped up at least 800,000 square feet of office space every year, from 2013 to 2017. At that point, it didn’t look like Amazon was going to slow down. But Amazon hasn’t snapped up any other office space recently. What is going on?
Amazon has signed up to lease 722,000 square feet of Rainier Square’s office space. But word around the industry is that they’re reconsidering their position. Amazon is now thinking of subleasing all 300 floors with Apple, Dropbox, and Oracle as possible tenants. All this sensational news is going on while Amazon is embroiled in a not so secret, nasty tax battle with the City Council prompting them to be on the lookout for HQ2. Right now, interest in Seattle is beginning to wane and Amazon is now shifting its sights somewhere else to satisfy its growing demand for office space – just across the lake to be exact.
Across the lake, onward to new things
Bellevue, Washington sits across Lake Washington with a population of 144,444 according to the most recent census (2017). As it is, it is already a more expensive city than Seattle with home prices averaging $858,000 versus Seattle’s $630,000. And for good reason, it has top-notch schools, a good mix of urban and suburban lifestyles, and an amazing view of lake and mountains (hence the name “belle vue” which means beautiful view in French). Like the rest of the industry, the Bellevue housing market had home prices dropping in recent years. Home prices dropped to 6.2 percent last year. Industry leaders know this is no cause for alarm, and with news of Amazon moving into the area, things could get frenzied really fast.
Movements within the city turn it into a formidable tech hub
Bellevue may be the original birthplace of Amazon but a few other tech giants have been growing roots in the city too. In fact, Facebook has leased a couple of buildings in downtown Bellevue that sum up to 85,000 square feet with another 338,000 square foot building underway. It has another building in Redmond in the works that will serve as their new centerpiece office building. Google may not have been in Bellevue for long but has had a long presence in the Kirkland Campus. It has recently come into Bellevue with a lease on One [email protected], an 80,000 square foot building, with plans to get another 30,000 square feet of space. Microsoft, T-Mobile, and Expedie all have HQs in the city, and they’re staying put. All that plus, Amazon’s apparent lease on 1 million square foot of office space which will house about 7,000 employees with plans to snag up more office space in the future.
What could this mean for stakeholders?
Bellevue could soon become the giant tech hub that Seattle is. An exodus of young and/or upwardly mobile buyers would be heavily considering this area if they are looking to live close to work. Increased millennial homeownership could be a growing trend in this market with tech hubs offering high paying jobs and attracting top talent around the world. This could keep real estate prices rising, even if the rest of the market does not bounce back. The growth of these tech hubs can help insulate the real estate market from fluctuating conditions.
With this evident real estate buying frenzy brought about by growing tech hubs, Bellevue is primed to be a hot, hot, hot real estate market which could be very well worth your time investing on. The market is primed for growth and opportunity where people are looking for something different – not just their parent’s home or their grandparents’ home. With the kind of demographics being drawn in by these tech companies, you could bet that modern construction and high tech, green homes could potentially be the next big thing.
Now could be the best time to buy investment properties in the area. Investing in rental properties could see you getting your return on investment in just a few short years. And don’t overlook the massive potential of investing in commercial spaces. Tech hubs are grabbing them up left and right. There’s no better time to get your foot in the door if you plan on investing in real estate.
At Davis Property Management, we can help you plan your next move and even help you grow and manage your business. We have a wide range of services that can help you grow your investment portfolio and experts who can give you sound advice. Contact us today to schedule a consultation.