New report dispels landlords' long-held fears

Commercial Analytics has released its inaugural apartment market data report. Team members are (left to right) Taylor Odegard, Brian O'Connor, Jim Bowles, Russ Johnson and Candice Chevalier. Photo: Anthony Bolante, PSBJ

By Marc Stiles  – Staff Writer, Puget Sound Business Journal
Feb 20, 2019, 5:46pm EST

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A report by a new Seattle company contains a big surprise: Seattle apartment landlords have not suffered from the new-supply glut as had been anticipated.

Commercial Analytics' inaugural report fills the void of locally sourced market data left after the unexpected closure of Dupre + Scott Apartment Advisors in December 2017. The Seattle company closed after 38 years of publishing the gold standard of market intel used by industry players from developers to public policy makers.

In downtown Seattle and South Lake Union, where some observers have been anxious over the addition of thousands of new units in recent years, the year-over-year vacancy rate ticked up about a point to 5.1 percent in September. The average rent increased 5.4 percent to $2,140. The 2017 data was from Dupre + Scott while Commercial Analytics gathered the 2018 numbers.

"The apartment market has remained pretty healthy," said appraiser Brian O'Connor of O'Connor Consulting Group. He and brokers Candice Chevaillier of SVN Whitecap and Jim Bowles of Lee & Associates co-founded Commercial Analytics in partnership with Seattle tech company NavigatorCRE.

What sets Commercial Analytics apart from national apartment market data companies is that the new firm, like Dupre + Scott, drills down by neighborhood, unit type and year built. The company's coverage area includes all four metro counties. It is a cloud-based service that crowdsources market information to provide fine-grain detail. In-house staff verifies data with landlords.

Commercial Analytics will release data about landlord concessions in its forthcoming development report, but the firm's January survey found that 28 percent of properties across the region offered free rent and other concessions, while in Seattle the number was 30 percent.

Among Commercial Analytics' upcoming offerings will be reports on apartment buildings' expenses, sales and investment activity and the condominium market.

The report costs $695 a year for the spring and fall rent-and-vacancy report, plus a $95 membership fee. It comes with a copy of a supplemental report called Data Junkie that analyzes market fluctuations and offers forecasts, which is penned by O'Connor.
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O'Connor wrote that King County's slowdown in 2017 was, in part, due to slower regional job growth, which subsequently rebounded. Given that employment growth is expected to slow this year to perhaps 40,000 jobs, down from 53,000 last year, it seems reasonable to expect lower demand and rising vacancies, he said.

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