Property values are at historical highs and construction costs are ever increasing.
Seattle is still enjoying a period of major development, but the uncertain economy is restricting the availability of capital for all but the surest projects and strongest borrowers. Development is a business that by definition must continue to build in order to remain viable. Successful development requires actively, yet selectively, seeking new opportunities and having the necessary financial strength to develop projects that have long-term financial feasibility. To increase returns and manage capital as efficiently as possible, developers and investors use leverage. Before beginning a development or purchasing a property, the overall economics must be understood, and debt considerations including availability, costs and terms such as preleasing thresholds must be addressed.