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As downtown Seattle offices empty, city facing years of 'zombie' towers

seattletimes.com

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Re: As downtown Seattle offices empty, city facing years of 'zombie' towers

#151

Post by hitekker »

lukeschlather wrote: post #129
naturalmovement wrote: post #126

Earlier quoted context omitted.

> The Seattle Times has always been a conservative rag The Seattle Times is Left-Center with a high credibility rating. [1] Such a deliberate distortion of the facts renders the rest of your screed null and void. [1] https://mediabiasfactcheck.com/seattle-times/

They're looking at national politics, and on that score, yes, the ST is liberal. When it comes to local politics the Seattle Times is conservative. Your objection is a bit like people who object that the Democrats are conservatives, from a European perspective, except this is about the city itself. The current mayor is liberal, the previous mayor was conservative. They're both Democrats and would be defined as libera…

Using local labels to communicate to an (inter)national audience is a bit foolish, I think.

In SF, we have a wealthy clique who are locally labeled as “progressives” and who are also contradictorily against new housing. They even veto’d building a new apartment complex on a parking lot!

I’d personally call that clique “NIMBY” since their “progressive” label is essentially designed for propagating denialism among the credulous.

Re: As downtown Seattle offices empty, city facing years of 'zombie' towers

#152

Post by anon7000 »

vessenes wrote: post #36

If you haven't lived in Seattle, it's hard to understand the problem. It's multifaceted; business climate, generally poor quality of the city itself as a walking / working destination, extremely hostile to business city government, and greener pastures (literally) east across the bay, which happen to be closer to some very large headquarters. The die was largely cast when Amazon called Seattle's bluff during COVID an…

Seattle is generally a fairly high quality city as walkability and bikeability goes. While office vacancies are up, sure, residential vacancies are not. The city is packed with people who enjoy and want to live here. The handful of blocks that makes up the business district aren’t as busy as they used to be, but that’s such a small part of the city.

Also, Amazon did not really “relocate” as much as open more offices in other cities. I know people supporting Amazon ELT and plenty of high level executives are here. They have huge amounts of money, employees, and office space in Seattle, and there’s no sign that’s changing. The areas close to Amazon’s office space are very attractive places to live, demanding high rent, and generally safe, green, and pleasant to exist in. (I lived near there for a few years.) The high rise apartments that have been opening year after year for a decade in these neighborhoods still have strong demand.

Am I selling it positively? Sure. But you’re selling it pretty negatively, in a way that doesn’t match what many people who live here really believe.

Anyways, Seattle has tax problems mostly because there is no income tax. But it is a challenge: to actually make the city safe and vibrant and even more great, we need to invest in public transit, biking, parks, and schools.

Re: As downtown Seattle offices empty, city facing years of 'zombie' towers

#153

Post by brookst »

edg5000 wrote: post #137
Schiendelman wrote: post #67

Seattle here, and a real estate nerd. This is almost entirely an artifact of the financial instruments used to pay for these buildings, regardless of any Seattle policy changes. The Seattle Times has always been a conservative rag, and their editorial board hates the new mayor, so they hit the "Seattle is dying" story as often as possible. They've got a long history of this whenever there's leadership they don't like…

Your argument is that it's simply because of dropping prices. Maybe that does explain the bulk of it. But the article seems to suggest it's the WFH transition. How much of the vacancy rate would be explained by that?

Is there any reason to think WFH rates would differ between Seattle and Bellevue?

I’m not super knowledgeable in this area but GP is right the The Seattle Times is a very partisan outlet that spins confirmation bias into everything. Left-leaning politicians elected? The rain is their fault. Centrists (because this is Seattle)? They’re doing the best they can, maybe give more money to Amazon?

Re: As downtown Seattle offices empty, city facing years of 'zombie' towers

#154

Post by hx8 »

halestock wrote: post #123
dlcarrier wrote: post #117

Earlier quoted context omitted.

In Bellevue, office vacancies are low because most have long term tenants… Well yeah, Bellevue isn't trying to drive all of the office tenants out of their city.

I'll bite, how's Seattle doing that?

Bellevue has a few advantages over Seattle. Seattle imposes a city level payroll tax that isn't in Bellevue, and there are other tax implications. Seattle's minimum wage is higher. Seattle has a more visible drug/homeless problem.

Seattle can charge a premium for its advantages over Bellevue because they provide additional value, and the premium Seattle charges is actually less than most people make it out to be.

Re: As downtown Seattle offices empty, city facing years of 'zombie' towers

#155

Post by anon7000 »

seawolf874 wrote: post #61
vessenes wrote: post #36

If you haven't lived in Seattle, it's hard to understand the problem. It's multifaceted; business climate, generally poor quality of the city itself as a walking / working destination, extremely hostile to business city government, and greener pastures (literally) east across the bay, which happen to be closer to some very large headquarters. The die was largely cast when Amazon called Seattle's bluff during COVID an…

The city has a notorious open air drug market within 2 blocks of one of its main tourist attractions at Pike Place. Downtown is generally not a pleasant place to visit.

I lived near there for several years. It’s bad but also highly localized. The extreme downtown core is such a small part of the city. Pioneer square, the waterfront, SLU, Seattle center, etc are all very nearly downtown. Area around the new convention center, the paramount, and 5th Ave theatre are totally fine.

Re: As downtown Seattle offices empty, city facing years of 'zombie' towers

#156

Post by zeafoamrun »

naturalmovement wrote: post #126
Schiendelman wrote: post #67

Seattle here, and a real estate nerd. This is almost entirely an artifact of the financial instruments used to pay for these buildings, regardless of any Seattle policy changes. The Seattle Times has always been a conservative rag, and their editorial board hates the new mayor, so they hit the "Seattle is dying" story as often as possible. They've got a long history of this whenever there's leadership they don't like…

> The Seattle Times has always been a conservative rag The Seattle Times is Left-Center with a high credibility rating. [1] Such a deliberate distortion of the facts renders the rest of your screed null and void. [1] https://mediabiasfactcheck.com/seattle-times/

Just goes to show how loony politics are in Seattle for ST to seem conservative to people.

Re: As downtown Seattle offices empty, city facing years of 'zombie' towers

#157

Post by brookst »

siren2026 wrote: post #139
lukeschlather wrote: post #129

Earlier quoted context omitted.

They're looking at national politics, and on that score, yes, the ST is liberal. When it comes to local politics the Seattle Times is conservative. Your objection is a bit like people who object that the Democrats are conservatives, from a European perspective, except this is about the city itself. The current mayor is liberal, the previous mayor was conservative. They're both Democrats and would be defined as libera…

As a European, Democrats are absolutely not conservative from a European perspective. There are multiple dimensions but at least socially they push everything further to the left than in Europe. (Which is also in my opinion why they are losing elections) Almost every social topic is pushed to the extreme left by the Democrats. Simply look at how many weeks abortion is allowed in blue state and compare with most Europ…

How do Democrats’ policies on health care, paid leave from work, unions, public funding of political campaigns, and public transit compare to European conservatives?

If you’re a single-issue abortion voter, yes the US democrats tend to propose fetal viability (22 weeks or so) as the limit, while most of Europe is 12 weeks. UK and Netherlands are 24.

But if you genuinely believe US democrats are wildly liberal, you must be that rare European Fox News watcher.

Re: As downtown Seattle offices empty, city facing years of 'zombie' towers

#158

Post by shawn_w »

asveikau wrote: post #96
Schiendelman wrote: post #58

Earlier quoted context omitted.

Earlier than that, they were actively dangerous. I spent a lot of my childhood in Belltown, and it was not a safe place in the late 80s and early 90s. SLU and Denny Triangle are amazing now. Those are some of the few places with restaurants open into the evenings. Amazon, like them or not, does a great job prioritizing local businesses in the retail spaces in their buildings. They can't all survive, but they've had a…

I haven't lived in Seattle since 2011. I remember Belltown having one or two blocks that felt a little spotty or like you wanted your guard up, but the rest of it was thoroughly gentrified by the time I left, and it was a common choice to live for new college grads from the suburbs arriving to work in tech. I have to assume the process has continued.

The area around 3rd and Blanchard is sketchy, but in the rest of Belltown the biggest hazards are incompetent Uber/lyft/doordash/etc. drivers and drunk people on lyme scooters.

Re: As downtown Seattle offices empty, city facing years of 'zombie' towers

#159

Post by sterlind »

siren2026 wrote: post #139
lukeschlather wrote: post #129

Earlier quoted context omitted.

They're looking at national politics, and on that score, yes, the ST is liberal. When it comes to local politics the Seattle Times is conservative. Your objection is a bit like people who object that the Democrats are conservatives, from a European perspective, except this is about the city itself. The current mayor is liberal, the previous mayor was conservative. They're both Democrats and would be defined as libera…

As a European, Democrats are absolutely not conservative from a European perspective. There are multiple dimensions but at least socially they push everything further to the left than in Europe. (Which is also in my opinion why they are losing elections) Almost every social topic is pushed to the extreme left by the Democrats. Simply look at how many weeks abortion is allowed in blue state and compare with most Europ…

and migrants? I think liberal parties in European countries seem to be much more supportive of refugees than Democrats, current Republican rhetoric aside. also, police, and guns. meanwhile, even with the issue you singled out, most red states in the US have enacted near-total abortion bans. do any countries in Europe ban abortion outright? are the conservative parties pushing for it?

Re: As downtown Seattle offices empty, city facing years of 'zombie' towers

#160

Post by bruce511 »

lotsofpulp wrote: post #150
Schiendelman wrote: post #130

Earlier quoted context omitted.

The financial instruments are commercial real estate loans. Those loans often do not allow the borrower to charge lower rent. Property taxes are not calculated that way. The property tax rate for a given year is backed into (a "mill rate") based on approved dollars of spending divided by total property value. If total citywide property value drops by 50%, the property tax rate doubles that year. So no, the property v…

>Those loans often do not allow the borrower to charge lower rent. I have never seen it substantiated that a promissory note in commercial real estate has a clause that dictates how the borrower can price their products or services. There will be terms for the borrower to be in default if they lose too much revenue or their expenses go up too much, such as leaving spaces empty: https://www.investopedia.com/terms/d/ds…

No there won't be clauses about rental amounts. It's not that straightforward.

It boils down to collateral for the loan.

A building has a value based on future rents. The owner borrows from the bank based on that value. The building is collateral for the loan.

The rental rate (not occupancy) determines the current building value. (Occupancy affects cash-flow, but not building value.)

Reducing rent improves cash flow, which may help paying the loan, but loan payments here are not important.

What is important is that the collateral covers the loan. Reducing the rent triggers a re-evaluation of the building value, which in turn affects the loan. There's no discretion here, it's just math.

On the other hand, as long as the owner continues to pay the installment on the loan, and as long as the building remains the same value, the banker doesn't have to do anything.

Yes, there are ways the price can be fudged a bit (bundling services, remodeling allowances and so on) but the "list price" of the rent can't come down without (automatically) triggering loan problems.

Since property companies tend to have multiple properties, cash flow is sufficient to pay the loan. So that's a lot better than triggering a revaluation.

In short commercial real estate does not behave like residential real estate.

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