Local Executives Talk State Of Seattle Title Insurance Market
Acquiring title insurance remains a key part of CRE deals in 2017. Bisnow recently caught up with Stewart Title senior business development officer Scott Miller and commercial services manager Peter Johndrow to discuss title insurance.
Bisnow: What is the most frequently misunderstood aspect of applying for title insurance?
Miller: We counsel our clients to take the initiative to start the title process up front to see what type of issues they may run into. With proper preparation, the process is a planned event that ensures the title is insurable and free of land mines, as opposed to a fire drill to clear matters unacceptable to a potential buyer just before expiration of the due diligence period or at closing.
Bisnow: Title insurance is a key component to many real estate transactions. How do you help first-time applicants understand the process of acquiring it?
Johndrow: Usually when working with a new client, we discuss the advantages of examining the title prior to listing or making an offer on the property. By doing so, they become more educated about the property and then can make informed decisions. We talk about certain areas where there might be title issues, such as access or certain restrictions that may affect the use of the property. We discuss which issues can be resolved and what types of coverages may be available to remedy a particular title issue. We treat our clients as true partners — by consistently focusing on long-term relationships, we create long-term mutual success.
Bisnow: In Seattle, what industries are driving commercial development?
Miller: Industries driving commercial development are technology and shipping with the increased presence of Amazon. Industrial office space is in top demand as more technology companies vie for space. Seattle is known for Amazon, Microsoft and the like, but its biotechnology sector also has helped in creating a boom in the market. Foreign investors have played a significant role as well.
Since 40% of commercial sales have been to foreign entities, money flowing into Seattle has created a vacuum of investment dollars that has driven the market. Thanks in part to this driver, we have the most cranes actively erecting buildings in the country. Actions in Canada have positively impacted foreign investment in Seattle as well. The Canadian government recently imposed a tax surcharge on foreign investors and restructured its Immigrant Investor Program (U.S. EB-5 equivalent). As a result, those foreign investors are looking at Seattle and the Puget Sound area to invest their money.
Bisnow: Where do you see the health of your local real estate market in five years?
Johndrow: Given the fact that many projects are funded through foreign investment from Asian communities and the huge expansion of technology, plus growth from attracting top talent across the country, the next five years should be relatively good. It may not be as explosive as it was the last few years, but we expect steady and continued development in office space to accommodate both new companies and those adding to their workforce. Multifamily development is an attractive area since it’s an undersupplied market based on workforce increases. Hotels also are prime growth opportunities, especially with the expansion of the convention center. With companies expanding, there will be an increased need for space to hold meetings and conferences.
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