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Marcus & Millichap Predicts Long Road to Recovery

SEATTLE, WA-The real estate investment firm says the economic slowdown is exacerbating an already tough job situation here, making it more and more likely the local commercial real estate industry will lag behind the nation as a whole in its recovery.

By Janet Parker | Updated on November 20, 2001

SEATTLE, WA-Puget Sound industry is now far more diverse than in days gone by. Nonetheless, a new report from Marcus & Millichap says significant job losses here, particularly in the aerospace and technology industries, are contributing to the region’s economic woes and adding to the troubles of its commercial real estate market.

Gregory Wendelken, Marcus & Millichap’s Seattle regional manager, says on the heels of Boeing’s recent announcement that it will lay off tens of thousands of employees, “it is evident that the region’s ties to the aerospace industry will result in a local economic slowdown.” According to the report, Boeing employs approximately 80,000 Puget Sound residents—representing 4.8% of the total employment base here. As much as 20,000 jobs could be lost in the cut-backs.

Wendelken says softening in Puget Sound aerospace and technology bodes for a regional economic rebound that will lag behind national recovery. The bright lining to his dark cloud of prediction is that he believes the impacts will be “less severe and not as prolonged as it was in previous cycles.” The report says long-term gains in Puget Sound real estate have historically outpaced losses sustained in cyclical downturns. Wendelken adds that while the local commercial real estate markets will be affected by reduced consumer spending—a byproduct of the layoffs, “the prospects for long-term growth are still positive.”

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