Downtown construction rebounds, led by apartments
The number of commercial and residential projects under way in downtown Seattle has tripled in the past 18 months. Also, prices for used Boeing 747 jumbo jets are at record lows.
Construction cranes are flocking back to downtown Seattle.
The Downtown Seattle Association (DSA), which tracks new projects, published a report this past week that details just how dramatically development activity has bounced back in and around the city center.
A snapshot earlier this month found 37 commercial and residential projects under construction, the DSA says, up from just 12 a mere 18 months ago.
What's more, 14 of those 37 projects have broken ground since New Year's.
Some qualifiers: The DSA defines downtown broadly, including Lower Queen Anne, South Lake Union, Pioneer Square and parts of Sodo, First Hill and Capitol Hill.
Its list includes not just private, for-profit, ground-up projects, but also government and nonprofit developments and major renovations — Sound Transit's Capitol Hill light-rail station, for instance, and Target's overhaul of the building where its first downtown store is slated to open next month.
Finally, current development activity still falls well short of 2007, when 51 projects were under construction.
Even so, the new numbers point to a remarkable rebound since the recession's depths.
One example: The DSA ordinarily publishes its development snapshot twice a year. So little was happening in mid-2010 that the association didn't even bother to produce one then, says Vice President Jon Scholes.
Now, "we can barely keep up with the overall activity," he says.
That activity is mostly in one sector, however: Apartments.
Twenty projects with a total of more than 3,900 units are under construction now, according to the DSA — the largest number since the association started keeping statistics in 2005.
That total seems certain to grow: This past week Holland Residential got a permit to start digging the foundation for its proposed 40-story, 386-unit apartment tower at Ninth Avenue and Pine Street.
Condos, however, are another story. In late 2007, the DSA found 16 projects with more than 2,800 units under construction.
Now? Just one project — Insignia, in the Denny Triangle, with 335 units. And it broke ground less than two weeks ago.
Office construction, too, is lagging: Just 758,000 square feet under construction, according to the DSA, compared with a peak of 4.8 million less than four years ago.
But Scholes predicts those sectors, too, will bounce back: Downtown's big employers, like Amazon.com and Nordstrom, are hiring, he says, and that's where it all begins. "We're fortunate as a downtown to have them."
— Eric Pryne: email@example.com
Bargain prices for
older 747 jumbos
Prices for used Boeing 747s are touching new lows as high fuel prices, slumping cargo traffic and the advantages of newer planes cool demand for the world's most popular widebody, Bloomberg News reports.
Carriers are replacing many of the older jumbo jets with more fuel-efficient planes, sending the value of 10-year-old passenger 747-400s to a record low $36 million, according to London-based aviation consultancy Ascend Worldwide.
Forty-eight of the 404 humpbacked passenger 747-400s worldwide have also been placed in storage, according to Ascend. Converting the older behemoths to freighters is less attractive in today's weak cargo market.
Boeing's two-engined 777 widebody, and to a lesser extent the Airbus A380 and the new 747-8, are beneficiaries of dampened interest in older 747s.
"There's not a lot of demand for the 747," said Paul Sheridan, Ascend's head of risk analysis. "They're mostly being broken up for parts."
Singapore Airlines sold its last 747-400 this year. Japan Airlines, has also stopped using the planes. Many other Asian airlines are also winding down use of the plane.
"When oil prices are high, you want your new airplane," Cathay Pacific Chief Executive Officer John Slosar said this month in Beijing. "The last thing you want to do is hold onto your older planes."
Boeing delivered 694 four-engine 747-400s between 1989 and 2009. The passenger version of the newest 747, the -8, entered service this year.
"We're seeing a lot of airlines understanding that they need more fuel-efficient planes and that bodes very well for us," Jim Albaugh, the head of Boeing's commercial-plane business, said in a Bloomberg TV interview.
European carriers are replacing 747-400s less quickly. British Airways will only retire the last of its fleet in about 10 years.
"It's a great aircraft, customers love it," said Willie Walsh, chief executive officer of BA's parent company.
— Bloomberg News
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