The real estate business is constantly impacted by outside forces, everything from the housing market to zoning laws and new businesses. To discuss the current trends, Eastside agents met in Bellevue for the Commercial Real Estate Leaders’ Breakfast hosted by the Business Journal on Aug. 2.
There were five speakers at the event and the discussion covered topics like how residential demand drives commercial development, Vulcan building in Bellevue for the first time, and the potential Chinese investment coming from the trade war.
Here is what some of the attendees had to say about the event:
The chief economist of Windermere Real Estate, Matthew Gardner said, “I’m actually more excited for the future of the Eastside today than [for] Seattle. The potential for growth here is more substantial.”
Vulcan Real Estate, which is planning two large downtown projects, sent Scott Matthews the senior director of acquisitions and residential development. “One of the things we like about Bellevue is there has been significant housing stock created here. Over the last 10 years a lot more residential has been built,” Matthews said. “That’s an important part of the infrastructure here and there’s more to come. It’s the live-work-play model. What the livability of downtown Bellevue looks like from the standpoint of a resident, we think that is important.”
Kidder Matthews senior vice president and partner Holly Yang spoke on the impact of China on U.S. real estate. “The trade war is very concerning. When there is this uncertainty, people tend to pull back. We haven’t felt a direct impact on commercial real estate yet, but the impact is felt by developer clients because construction costs have shot up so much due to the tariffs on steel and aluminum,” Yang said. “That’s one direct impact on the U.S. side. On the China side, the currency has devalued. That makes investors more eager than ever to ship the money overseas to invest.”
Mike Schreck, executive manager of Newark Knight Frank, said, “We’re seeing FANG (Facebook, Amazon, Netflix, and Google) continuing to take down more space. The one that’s not up here is Netflix. There are other sectors that are going to drive demand for space. Security and online payments are big ones. Those two I would put first and foremost. And obviously the cloud, which will continue. There are many more companies that are planning on coming up here in the short term.”
The founder and CEO of Urban Renaissance Group – a company that invests in the Eastgate I-90 area – Pat Callahan said, “At one time, the I-90 submarket achieved the highest effective rents on the Eastside. That’s going back 20 years. It was the result of being so connected to the interstate.”
“It was by far the easiest place to get to. I think the submarket has an even better future for a lot of reasons. One is the transit access is increasing and ultimately light rail will be there,” he said. “The interstate will always be there and will always be an advantage. Outside of downtown Bellevue, I think it’s one of the top three Eastside markets along with Redmond and Kirkland.”
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Image by Ken Lund