BELLINGHAM REAL ESTATE COMMERCIAL INVESTMENT QUARTERLY REPORT April 2009

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The  Bellingham market will continue to suffer for a period of time. Expect demand to decline for all property types as businesses continue to reduce staff and space. Absorption to continue to decress in the near term; Vacancy rates to increase; Continuing downward pressure on prices and upward pressure on cap rates; Flat to negative rental growth; and Landlord concessions.

Retail Recent Bellingham retail transactions indicate properties are selling at an average price of $191 per sq. ft., less than Seattle’s average of $200. The national  average is $131 per sq. ft. New construction has slowed down and several big box stores have closed the doors. The capitalization rate for retail properties in the Bellingham area is 6.11%, less than the Seattle area at 6.3%and the national average of 6.6%.

Apartment The average price based on current sales of Bellingham apartment properties is $84,653 per unit, higher than the national average of $77,051 per unit. The Bellingham apartment sector has an average capitalization rate of 6.0%, higher than the Seattle average of 5.4% but even with the national average of 6.0%.

Industrial The fundamentals for the  Bellingham area industrial market have slowed considerably during the last quarter of 2008.  The availability rate has increased and the average rental rate has decreased.  The average selling price for industrial space in the Bellingham area is $78 sq. ft., lower than the Seattle area of $108 per sq. ft. but higher than the national average of $63 per sq. ft. Capitalization rate for the Bellingham area is 7.1%, higher than the Seattle area  industrial sector of 6.6% and lower than the national average of 7.5%.

Office The Bellingham office market showed signs of weakening during the last Quarter of 2008.  The vacancy rate is going up and net absorption has leveled off.  Average asking rents have come down.  Recent sales indicate that office space is selling at an average price of $179 per sq. ft., lower than the $195 per sq. ft. for Seattle but higher than the national average of $137 per sq. ft. The average capitalization rate based on current sales for Bellingham is 6.8%, more than the Seattle average of 6.1% but less than the national average of 7.5 %.

		Hardy and Associates Real Estate Company Blain Hardy 360-393-2494 307 Telegraph Road Bellingham, WA  98226