This is the fifth in a series of in-depth analyses of submarket-level trends that we’ve observed in recent years.
By: Capital Markets Team
The Evolving Neighborhood of Ballard/Fremont
Ballard / Fremont is one of the founding neighborhoods of Seattle. This submarket lines the north edge of the Lake Washington Shipping Canal from the shores of Puget Sound all the way to the western edge of the University District. The creation of this canal in the early 20th century attracted immigrants and encouraged the growth of the fishing and timber industries. Today, while timber has turned to tech, a strong sense of history and industry continue to define this submarket’s identity.
Building up the Neighborhood
Most of the canal is designated as IG (General Industrial) and IC (Industrial Commercial) zoning, which is in place primarily to protect the maritime industry. Fortunately, the definition of industrial has expanded to include software manufacturing, which led to the development of what was originally known as the Quadrant development and now includes Adobe, Google and Tableau as tenants.
There are other pockets of commercial development near the canal, as developers entering this neighborhood continue to reach for maximum buildable square footage by being creative with the definition of industry and use. Along with the growth of creative office (Watershed Building), retail (Ballard Blocks) and tasty micro-breweries (too many to call out just one*) have become prevalent as the demographics within the market shift.
*We are happy to provide recommendations and grab a beer with you!
Seattle’s need to create housing and density in commercial districts prompted significant zoning changes in this submarket in April of 2019. These zoning changes included adherence to Mandatory Housing Affordability (MHA) requirements for new development as well as height increases in most of the commercial zones.
We have seen notable multifamily development in downtown Fremont and Ballard along with Stone Avenue, which should continue due to demand and the 2019 zoning updates. Of the recently delivered units, 91% of them are studios and one-bedroom. We expect this trend to continue as tech expands in Seattle and housing needs grow for the young, single employee base.
Fortunately, there is room to grow. There are a significant amount of LR (Low Rise) zoned sites that buffer the NC (Neighborhood Commercial) corridors, which will shake loose value-add opportunities for multifamily developers looking to get into this tight market.
Submarket Zoning Map
Seattle’s need to create housing and density in commercial districts prompted significant zoning changes in this submarket in April of 2019. As a result, we have seen notable multifamily development in downtown Fremont and Ballard and expect this trend to continue.
Building images from CoStar and Rays Boathouse
Aerial images from M Walmsley
Data by Kinzer Partners and CoStar