While most of the Seattle crews working on the mammoth State Route 99 project may be cooling their heels as Bertha, the world's largest tunneling machine, remains stuck underground, another job creator has been moving swiftly through the city—office construction.
Demand for space from Amazon, Google, Microsoft and other tech giants has sent year-over-year office sector construction activity skyrocketing 169% to $629 million, according to McGraw Hill Construction Dodge data. ENR Northwest is part of MHC. The phenomenon makes office space the fastest-growing industry marketplace in the city, says Cliff Brewis, Dodge senior director of editorial operations, Clayton, Calif. Only about eight other cities nationwide, San Francisco and Baltimore among them, posted a higher percentage increase in this sector last year.
Brewis says the huge growth rate is an anomaly, however, and that the city is not likely to sustain it long term as demand is eventually met. But for now at least, the drive for office space continues, fueled by megaprojects such as Amazon's 3.3-million-sq-ft, three-phased project that consumes three city blocks downtown. Targeted for completion in late 2016, the project includes three towers as well as three NBBJ-designed intersecting spheres made of glass and steel. The spheres will total 65,000 sq ft and feature trees and plants from around the world.
Besides office, other construction markets are also taking off due largely to the tech expansion, industry experts say. "Not only are the [tech firms] building buildings to work in, all of those people who work for them and move here need a place to live, play, worship and buy groceries," says Kathleen Garrity, president of the Associated Builders and Contractors, Western Washington chapter. Housing contractors especially are reaping the benefits from this, she adds.
Residential construction in Seattle grew to $3.9 billion last year, up 10% and in line with many other metro regions nationwide. This market has also been growing statewide, with single-family construction, in particular, on the rise, Brewis says. Seattle's multifamily market dipped slightly to $1.2 billion, but it has been as erratic as it has in the rest of the state, he says. While it has trended up during the last few years, it hasn't always "been a straight line," he says.
In Seattle, "we're seeing a movement downtown, an area of more dense residential construction activity and more apartments than condo construction," Brewis says. The condo sector was overbuilt prior to 2008, he adds, but it is "beginning to come back."
Major residential projects include the $450-million Insignia Tower condominiums, due for completion next year, and the $95-million Viktoria Apartments, due for completion later this year.
Garrity says the tech sector is also behind the city's influx of a young and mobile work force that leans toward renting apartments rather than buying homes. This, she says, has led to a resurgence in demand for urban neighborhoods that are reliant on mass transit and amenities that are "walkable," or within short distances from residences.
The urban population surge has helped push for projects such as the Seattle Streetcar Network, Garrity says. The network, most of which is still in planning and design, radiates a few miles from downtown, where Amazon and a lot of other businesses are growing, and links to bus routes and light rail lines.
"This is a very environmentally conscious community that ... believes we need options besides just highways," says Jim Thomson, an HNTB vice president and Northwest district leader. His firm is involved in several major projects in the city including SR 99 and Sound Transit's $2.8-billion East Link and its $1.45-billion U-Link light rail projects.
"There's a lot of growth in the metro region with big business—Boeing, Amazon, Starbucks, Costco, a gaming industry, tech and biotech to name a few—that continues to grow," he says. "People here are looking for alternatives [such as rapid transit, light rail and bike lanes] to try and make things more pedestrian-friendly."
In other transport sectors, BNSF railroad has a roughly $106-million maintenance and rail expansion program under way statewide. The Seattle-Tacoma International Airport is eyeing an expanded international arrivals building.
THE ‘BRAKing’ Points
The city's health care sector, however, remains a question mark long term amid marketplace consolidation and uncertainties associated with implementation of the Affordable Care Act, Brewis says. "There are some very big projects in the pipeline, and right now [health care is] expected to be up in 2014, but it might underperform compared to where it has been historically," he adds.
Seattle's public works sector, like elsewhere in the nation, is also expected to continue softening as federal, state and local funding sources dry up. "Over 2014 and certainly by 2015-2016, there will be declines in almost all transportation marketplaces unless some other sources of funding develop," Brewis says.
Even so, Seattle has several large transport projects under way or planned. One major job on the drawing board is the state Dept. of Transportation's $200-million SR 520-West Approach Bridge North project.
But it is the city's SR 99 Alaskan Way Viaduct Seawall replacement project—where the mammoth TBM Bertha is stalled 60 ft below ground—that has been grabbing headlines. Seattle Tunnel Partners, the design-build joint venture contractor on the $3.1-billion project, has begun building underground walls of a circular repair pit at the site to give crews access to the front of the 57.5-ft-dia machine, the state DOT says. Tunneling work, however, is not expected to resume until March 2015.