Seattle Office Space News – May 2017

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of May 2017.

OFFICE DEVELOPMENTS

This month Geekwire took a look at how Amazon, Paul Allen, and Clise properties have worked together to change the landscape of Seattle and its real estate footprint forever. Clise properties is a multi-generational real estate firm that originally purchased properties in the Denny Triangle after the depression. Those properties are now home to the massive Amazon world headquarters. Similarly, Paul Allen had control of a large swath of land in South Lake Union that he wanted to donate to the city for a park, when the vote failed; Allen began to develop the land, the majority of which would be occupied by Amazon. At the end of 2016, Amazon had approximately 8.5 million square feet in Seattle and it is estimated they will occupy 12 million by 2022.

Also in May, Amazon announced that Mary’s Place, a Seattle based homeless shelter, will occupy 47,000 square feet in Amazon’s new 24 story office development on the block bound by Seventh Ave, Blanchard Street, Eight Ave, and Bell Street.

Another massive development by Vulcan has started in South Lake Union. This time, the anchor tenant will be Google, which will occupy about 600,000 square feet of office space on the two block site directly to the south of MOHAI in South Lake Union.

BUILDING SALES

Two buildings were reported to have traded hands in Seattle in May. The first is the Frank Gehry designed home to Facebook in south lake union.  The ten story 351,731 square foot building known as Dexter Station sold for $286 million or $813/sf and it is not immediately clear who the new owner is.

The second building that traded hands in May was Freemont Village Square, a 42,840 square foot building in the Fremont Neighborhood at 3601 Fremont Ave N. Local investors Eric Guenther, Dan Ederer, and Colin Madden paid about $16.6 million for the property that is approximately 70% vacant.  The group plans major upgrades to the building and will be aggressively looking for tenants.

OFFICE LEASES

In a surprising move to many, F5 networks announced that they will be leasing all 516,000 square feet of office space in the new Mark Tower being developed by Daniels Real Estate at 801 5th Ave.  The name of the new tower will change to “F5 Tower”. The tower will also contain a luxury SLS hotel on floors 3-15. Here is a statement from F5: “Our move to F5 Tower will provide current and future F5 employees with an iconic, modern corporate headquarters that aligns with our growth as a company and showcases our significant place in Seattle’s technology industry. The new space will provide a dynamic work environment that will help attract top talent, while giving us room for continued growth.”

ECONOMY

Once again, Seattle topped the nation in population growth, rental increases and average home prices.  Seattle is now the nation’s fastest growing city and has just hit a population of over 700,000.

In relation, Seattle continues to have the nation’s fastest rising home prices with the year over year increase in March hitting a record 12.3%; the second place city was Portland at 9.2%. Seattle’s housing market also tops the nation in the number of number of bidding wars where 90% of homes have multiple offers with escalation clauses bumping the average single family home price to $722,000.

Not surprisingly the rental rate asking prices in Seattle also topped the nation with an average growth of 5.4%.

With a huge population boom, construction continues to be at an all-time high in the Emerald City. Construction labor cost here is now the third highest in the world behind only Zurich and New York.

Finally, with all of the existing and new intellectuals in Seattle, it is no surprise that Seattle was recently ranked one of the top 10 cities in the U.S. for innovation by the publication Innovation Leader.

TUNNEL/VIADUCT

Now that Bertha has finished digging it is being cut apart and hauled away. There were no other significant tunnel updates in May.

ARENA

Key Arena is currently being considered a national historical landmark, due to its construction during the 1962 world fair. If the Arena is designated then it may entitle the group whom renovates the structure up to $70 million in federal funds. There continues to be debates in the city council on whether to build a new arena in SODO for potential NHL and NBA teams, or renovate the existing Key Arena structure.

OTHER NEWS

In May Geekwire took a look through the Sonos’ engineering office on Capitol Hill. Photos of the space can be found here.

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Seattle Office Space News – April 2017

News

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of April 2017.

OFFICE DEVELOPMENTS

Early this month, the Seattle City Council unanimously approved an upzone of Downtown and South Lake Union to allow for taller buildings. In exchange for the ability to go taller, developers will be required to contribute towards affordable housing. The City Council estimates that the most recent upzone will generate around 2,100 rent restricted apartments.

Amazon has released renderings of its newest office project at 2205 Seventh Ave. Designed by Graphite Design Group; the 17 story 405,000 square foot building is designed to look like an urban treehouse. A timeline for completion was not released to the press.

New aerial photos shown here illustrate just how much impact Amazon has had on the Denny-Triangle neighborhood. Amazon has built (or has plans to build) over 4 million square feet in the once lowly populated area.

BUILDING SALES

There were no significant building sales reported in April.

OFFICE LEASES

Although it has not been confirmed, there are rumors swirling in the commercial real estate world that Amazon has its eyes on the 58 story Rainier Square tower. The 1.1 million square foot project on the corner of fourth and union is scheduled to open in 2019. Amazon has been on a leasing spree lately bringing its total footprint close to 12 million square feet in Seattle.

ECONOMY

The Seattle housing market continues to be on fire as area home-price hikes once again lead the nation. The typical single family price rose 12.1 percent as of February (compared to a year ago); more than doubling the average national home price increase of 5.8%.

The new median sale price in Seattle reached a record of $630,800, as a frenzy of well-paid tech workers continue to move into the Seattle region.

In research by Seattle based Zillow, the average renter in Seattle needs a raise of $1,248 per year to keep up with rising rents. The average rent for the Seattle area was $2,100 according to the report.

In a similar report, Axiometrics concluded that the Seattle multifamily market is “solid and stable”. Occupancy rates in the area have continued to remain flat at 95.6 percent even with a continuous supply of units coming online, keeping in tune with rapid population growth.

TUNNEL/VIADUCT

The giant tunnel boring machine Bertha, finally reached daylight this month at Sixth Ave North and Thomas Street where it broke through a five foot thick concrete wall. Bertha will now be slowly disassembled in the rescue pit. Bertha initially began digging its 9,270 foot path in July of 2013 but was plagued with a myriad of delays. Construction on the double decker highway in the tunnel that has now been excavated is expected to finish in 2019. The WSDOT released video and drone footage of the breakthrough of Bertha here.

ARENA

Two groups have submitted proposals for a renovation of Key Arena to the City. The first, proposed by AEG and Hudson Pacific Properties offered a $520 million dollar renovation of the existing structure and would have a maximum seating capacity of 19,200. Oak View Group has also submitted a redevelopment plan with a price tag of $564 million and a maximum capacity of 19,000.  A community advisory panel will review the plans and make a recommendation to Mayor Ed Murray in June. The goal is to have a deal by years end. Further details on the groups proposals can be found here and here.

OTHER NEWS

This month during Facebook’s developer conference, Geekwire noticed that many of its latest innovation can be traced back to the Seattle office. Facebook has now been in Seattle for seven years and has surpassed more than 1,000 employees in the Northwest.

Geekwire is also currently holding voting for this years “Geekiest Office Space” which will be announced at the annual Geekwire Awards.  The contenders include: Chef, Facebook, Payscale, Salesforce, and Vicis. Photos and voting can be found here.

Finally, the daily Journal of Commerce took a look at the new office for DLR Group at 51 University Street that embraced the open design concept in a historical building. Photos of the space can be found here.

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Q1 Seattle Office Market

General Conclusion: Seattle’s office market stayed flat in the beginning of 2017 with vacancy rates increasing slightly to 7.3% in Q1 2017 up from 7.1% in Q4 2016. Year to date Net Absorption for the Downtown Seattle Office Market was negative (201,626) square feet in Q1 with over 6.3 Million square feet under construction. Even with a slight increase in vacancy, the market is still very healthy as there continues to be strong demand for Seattle commercial real estate investment product. Landlords continue to be bullish on rental rates and concession packages across all submarkets and building classes when compared to historical trends in Seattle. Market fundamentals are expected to be in favor of landlords until vacancy crosses the 10% threshold.

Economy:  The Seattle/Bellevue/Everett area has continued to see significant Job growth with preliminary seasonally adjusted unemployment decreasing to 3.5% in February of 2017 down from 4.3% in Q4 2016 according to The Washington State Employment Security Department.  The Bureau of Labor Statistics is reporting a slightly higher rate of 3.9% for the Seattle-Tacoma-Bellevue area.

Office Construction: While many projects that were under construction last year have delivered, Seattle continues to be at an all-time high construction boom with the following developments all currently under construction:

  • Amazon II, and Amazon Phases VI, VII & VIII totaling:~ 2,094,000 square feet (100% preleased)
  • Block 20 : ~1,100,000 square feet (100% preleased to Amazon)
  • Troy Block :~817,000 square feet (100% preleased to Amazon)
  • Madison Centre:~750,00 square feet (23% preleased to Davis, Wright Tremaine & others)
  • 333 Dexter:~650,000 square feet
  • The Mark:~528,000 square feet
  • Tilt 49:~307,296 square feet (100% preleased to Amazon)
  • The Alexandria Center: ~288,850 square feet (100% preleased to Juno Therapeutics)
  • Hawk Tower:~208,840 square feet (64% preleased to Avalara)
  • 15th & Market:~204,000 square feet
  • Arbor Blocks East: ~196,208 square feet

Office Developments:  The following office developments are currently being proposed:

Amazon revealed further expansion plans…again. The E Commerce giant has filed permits to build a 17 story office building at 2205 7th Ave, where the Days Inn currently sits. Amazon recently surpassed 341,000 employees globally and nearly 40,000 in Washington state.

The Seattle City Council unanimously voted to “up zone” the University District neighborhood in Seattle, allowing developers to build much higher than current limits if they contribute to the City’s affordable housing initiatives (HALA).  Several parcels currently zoned between 65-85 feet can now reach heights of 85-320 feet. In addition, several single family parcels are now zoned for low rise multifamily uses. Many community members think that the University District could be the next big “tech hub”, given its proximity to the University of Washington, walkability, and the spur of new developments that will likely follow the upzone vote. Using the same HALA framework, a similar plan is currently in the works for both South Lake Union and the Downtown core. The Seattle City Council will vote in April whether to approve this measure.

Earlier this year it was announced that Big Fish Games will be moving to the renovated Maritime Building on Seattle’s waterfront at 911 Western Ave. The developer has now filed plans showing that the project will be complete for occupancy by mid-2018, just a year before the new waterfront promenade is estimated to be completed.

Unico Properties acquired a 60,000 square foot building at 701 Dexter in South Lake Union a little over a year ago and have just filed plans for a renovation. Due to height restrictions in the area, Unico plans to extend the building envelope over what is currently a surface parking lot to create 40,000 additional square feet of office space. Unico has not released a timeline for construction to begin.

At the corner of Second and Union, crews have begun to demolish several small buildings to make room for Skanska’s 2+U project. The 650,000 square foot office project is expected to be completed in the second quarter of 2019.

Office Sales:  In general, building sales in the greater Puget Sound region saw a slight uptick from the fourth quarter of 2016. However, only one building traded hands in the downtown Seattle market during Q1:

  • New York based TriStar and RFR Holdings purchased the 290,647 square foot Urban Union building located at 501 Fairview Avenue in South Lake Union and 100% leased by Amazon. Schnitzer was the seller fetching $268.9 million or $925.32 per square foot, setting the new highest per-foot sale record.

Office Leases:  Office leasing activity in the first quarter of 2017 increased slightly from Q4 2016, mostly fueled by technology companies.  The following office leases were completed in Q1:

  • Once again, Amazon made headlines in office leasing news. The ecommerce giant has just leased all 300,000 square feet of the Tilt 49 office building in South Lake Union. The developer, Touchstone, has been working on the project since 2015 and expects to be complete near the end of this year. It is estimated that Amazon will occupy 12 million square feet in Seattle by 2020.
  • Facebook announced in January that they leased the entire 150,621 square foot 1101 Westlake building, which brings their total footprint in the region to nearly 1 million square feet.
  • Delta Dental will fill the last remaining vacancy at 400 Fairview in South Lake Union. Delta plans to move from Northgate to the new 61,000 square foot facility this summer.
  • Google revealed that they will be taking over the 50,000 square foot former Sound Mind and Body gym that was previously converted to office and occupied by Tableau
  • Snap Inc, (better known as Snapchat) leased nearly 50,000 square feet at the Market Place Tower. The space that Snapchat will move into was just recently vacated by Redfin.
  • Apple has expanded by approximately 20,000 square feet in downtown Seattle at 601 Union street.
  • Kaiser-owned Group Health stated that about 100 employees will be moving from its Westlake Terry building to Two Union square at the expiration of its lease. The remainder of the employees in Seattle will be relocated to a new facility currently under construction in Renton.
  • Sound Transit continues to expand in Pioneer Square, adding just under 50,000 square feet at 705 Union Station.
  • Finally Local Company Zillow is also expanding. The online real estate company leased the top two floors (38,000 square feet) for expansion at the company’s headquarters in downtown Seattle at 1301 2nd Avenue.
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Seattle Office Space News – March 2017

News

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of March 2017.

OFFICE DEVELOPMENTS

Seattle continues to be at an all-time high construction boom. At the end of 2016, over 68 major projects were underway (from Sodo- South Lake Union) the most of any time since recording began in 2005. Nearly two thirds of that development is in the multifamily sector with the remaining third being large office developments.

Earlier this year it was announced that Big Fish Games will be moving to the renovated Maritime Building on Seattle’s waterfront at 911 Western Ave. The developer has now filed plans showing that the project will be complete for occupancy by mid-2018, just a year before the new waterfront promenade is estimated to be completed.

Unico Properties acquired a 60,000 square foot building at 701 Dexter in South Lake Union a little over a year ago and have just filed plans for a renovation. Due to height restrictions in the area, Unico plans to extend the building envelope over what is currently a surface parking lot to create 40,000 additional square feet of office space. Unico has not released a timeline for construction to begin.

At the corner of Second and Union, crews have begun to demolish several small buildings to make room for Skanska’s 2+U project. The 650,000 square foot office project is expected to be completed in the second quarter of 2019.

This month, mayor Ed Murray signed legislation allowing for the upzone of the University District. This is the first Seattle neighborhood to use HALA (Housing Affordability and Livability Agenda) which allows for developers to build higher buildings in exchange for contributions towards affordable housing. Many sites in the University district can now be built up to 320 feet for residential towers and 160 feet for office.  Using the same HALA framework, a similar plan is currently in the works for both South Lake Union and the Downtown core. The Seattle City Council will vote in April whether to approve this measure.

BUILDING SALES

There were no reports of significant office building sales in March.

OFFICE LEASES

Another month, another huge lease for Amazon. The  ecommerce giant has just leased all 300,000 square feet of the Tilt 49 office building in South Lake Union. The developer, Touchstone, has been working on the project since 2015 and expects to be complete near the end of this year.

In addition, the DJC took a look at the new North Highland offices in Seattle, where they have leased and renovated just under 6,000 square feet of the historic Standard Building.

ECONOMY

According to the most recent Silicon Valley Competitiveness and Innovation Project’s report, Seattle’s population is growing at nearly double the rate of Silicon Valley. Much of the population increase is due to Seattle based tech giants such as Amazon and Microsoft, but more and more Bay Area companies such as Google and Facebook continue to expand in the Northwest as well. Although Seattle’s job growth has started to outpace the valley, Seattle continues to lag when compared to other tech hubs in the number of venture capital fundings and IPO’s.

With all of this Job Growth the Seattle-area unemployment rate has dropped to 3.5% in February with the United States unemployment rate holding steady at 4.7%. In addition, the Seattle area was the ninth fastest growing metro region in the nation according to population estimates by the U.S. Census Bureau.

After a brief winter slowdown, King County homes have surged to record heights. The median single family home price was $560,000in February up 6.7% from January. The new price levels mean that Seattle homes have nearly doubled in median price over the last five years. New data from Zillow, suggest that Seattle has the second fastest home value increase in the nation.

TUNNEL/VIADUCT

Bertha’s course was slightly altered this month after crews discovered that the machine was about six inches away from the correct location. The slight mishap did not seem to cause any delays and on March 28th the Seattle Tunnel Partners announced that Bertha is just 219 feet from its final destination. The new double-decker highway in the tunnel is still expected to open in 2019.

A new 360 video has also been released this month showing footage of how the highway is being assembled as Bertha continues to mine along.

ARENA

The saga of if and when Seattle will see a new stadium has not become any more clear in the past few months. In 2016, the City did not approve a vacation of Occidental Avenue which would make potential developer Chris Hansen’s proposed SODO arena “shovel ready”, which is what it would take to attract a NBA team. At that same time, the City Council has been wrestling with the thought of what to do with publicly owned Key Arena in Queen Anne. Just recently, Hansen agreed to waive exclusivity to the Key Arena project and that has opened the process to other alternatives.

OVG and AEG are two entertainment firms that are sending redevelopment proposals for Key Arena to the city by April 12th. For now, we will have to wait and see what the City thinks of these proposals.

OTHER NEWS

Two northwest projects have won Engineering News Record magazines “Best of the Best”. Google’s new office building in Kirkland won the green category while the new Allen Institute building in South Lake Union being named best higher education project.

The PSBJ also took a look at Tableau’s new Northedge Building in Wallingford, photos can be found here.

Finally, this month Geekwire chatted with molecular biologist John Medina on the effect of office space on employee’s happiness and productivity. Interestingly enough, Dr. Medina stated that a huge open office space is not always best, while it does seem to increase creativity it can be tough for many employees to focus on complex tasks in this environment.  Medina did offer a warning that research in the topic is very early: “Our understanding of how (the brain) works is childlike, particularly in relationship to the kinds of questions we are asking about designing buildings”.

 

 

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Seattle Office Space News – February 2017

News

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of February 2017.

OFFICE DEVELOPMENTS

In February Amazon revealed further expansion plans…again. The E Commerce giant has filed permits to build a 17 story office building at 2205 7th Ave, where the Days Inn currently sits. Amazon recently surpassed 341,000 employees globally and nearly 40,000 in Washington state.

Also this month the Seattle City Council unanimously voted to “up zone” the University District neighborhood in Seattle, allowing developers to build much higher than current limits.  Several parcels currently zoned between 65-85 feet can now reach heights of 85-320 feet. In addition, several single family parcels are now zoned for low rise multifamily uses. Many community members think that the University District could be the next big “tech hub”, given its proximity to the University of Washington, walkability, and the spur of new developments that will likely follow the upzone vote.

BUILDING SALES

There were no building sales reported in February.

OFFICE LEASES

Office leasing in February was again driven by the tech sector. Google revealed that they will be taking over the 50,000 square foot former Sound Mind and Body gym that was previously converted to office and occupied by Tableau.  Another California based tech giant, Apple, added another floor at the Two Union Square building in Seattle with many sources stating that the company is on the lookout for much more space in the near future. Apple declined to mention how many employees are at the downtown Seattle site, but revealed that they have 1,200 people in Washington State including retail locations and an engineering center in Vancouver Washington.

Kaiser-owned Group Health stated that about 100 employees will be moving from its Westlake Terry building to Two Union square at the expiration of its lease. The remainder of the employees in Seattle will be relocated to a new facility currently under construction in Renton.

Finally, it was announced that Delta Dental will fill the last remaining vacancy at 400 Fairview in South Lake Union. Delta plans to move from Northgate to the new 61,000 square foot facility this summer.

ECONOMY

Seattle continues to be at the forefront of technology growth and our local economy continues to reap the benefits. A new study ranked Seattle as the second highest paying market for tech workers with the average salary being $126,000, just behind San Francisco at $134,000.

High paying jobs and hiring sprees continue to feed a development frenzy of office and residential construction in the downtown Seattle core. In the last two years, over 5 million square feet of office space has been built with an estimated 13 million more to come by 2020.  In the residential market, more than 20,000 units have been built in the past 10 years with an additional 30,000 currently under construction. In the region, Colliers estimates that 100,000 new apartments will be built in King, Pierce, and Snohomish counties from 2010 to 2020.

The downtown core is now home to over 70,000 residents, which is up roughly 18% since 2010.

Not surprisingly, U.S. News and World Reports ranked Seattle as the sixth best city to live in the country by ranking migration, desirability, quality of life, value and job market health.

TUNNEL/VIADUCT

Tunnel boring machine Bertha has continued to plow along with no delays. The dig is now more than 83 percent complete with only 1,600 feet to go; crews expect Bertha to reach daylight this May.

OTHER NEWS

Chris Hansen took another shot at building a new Arena by offering to finance the stadium without public subsides, with the exception of a waiver of admission and occupation tax for revenue generated out of town. Hansen has asked the City Council to close part of Occidental Ave South, so that they can assemble enough land for the project.

Seattle has been on pace for the past few years to reach commuting standards set several years ago. A new study revealed that only 30 percent of city center workers drive in alone. Although the working population has increased by 45,000 in the past six years only 2,255 of those employees drive by themselves.

Finally, the Pike Place Market construction has been humming along and opening is set for June 29th.  Photos of the progress can be found here.

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Seattle Office Space News – January 2017

News

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of January 2017.

OFFICE DEVELOPMENTS

The Schuster Group, which has been known locally for developing the Walton Lofts and other high end housing, has launched a new division called Full Scale that will focus on consulting, project management and real estate services to other developers. Full Scale’s first customer is the 202 luxury apartments that will be a part of the Rainier Square expansion. Construction on the mixed use project, which is mostly office is expected to begin this year and end in 2019.

Also, in January Hines Real Estate showed off some of the features of its $46 million dollar renovation at 800 Fifth Avenue in Downtown Seattle. Photos of the renovated lobby, restrooms, and elevators can be found here.

BUILDING SALES

Just one office building was reported to have traded hands in January.  New York based TriStar and RFR Holdings purchased the 290,647 square foot Urban Union building located at 501 Fairview Avenue in South Lake Union and 100% leased by Amazon. Schnitzer was the seller fetching $268.9 million or $925.32 per square foot, setting the new highest per-foot sale record.

OFFICE LEASES

Several technology companies expanded their footprint in January. Facebook announced in January that they leased the entire 150,621 square foot 1101 Westlake building, which brings their total footprint in the region to nearly 1 million square feet.

Another California-based company Snap Inc, (better known as Snapchat) leased nearly 50,000 square feet at the Market Place Tower. The space that Snapchat will move into was just recently vacated by Redfin.

Local tech titan Zillow is also expanding. The online real estate company leased the top two floors (38,000 square feet) for expansion at the company’s headquarters in downtown Seattle at 1301 2nd Ave.

ECONOMY

2016 marked the best year ever for the Seattle area housing market. The median home price increased by more than 12% in King, Pierce, and Snohomish counties in December alone, and there seems to be no signs of a slowdown with inventory at an all-time low.

Seattle economist Chris Medford talked with a panel about how the election of Donald Trump will impact the Puget Sound Economy. For the time being, he mentioned that there is unlikely to be a dramatic impact and that the tech sector growth will continue to fuel the market forward. Larger changes to NAFTA and other trade agreements will take more time and require congressional approval. Medford estimates that it will take twelve months before real impacts can begin to be seen or evaluated.

With the hot commercial real estate market there seems to be a new acronym being thrown around: “GAFA”. This of course is in reference to Google, Amazon, Facebook, and Apple all of whom have been expanding very quickly in Seattle.

Amazon alone now accounts for nearly 20% of Seattle’s office space inventory, the highest concentration of any single corporate entity in the country. Many experts predicted that Seattle would have started to see a slowdown in both the commercial and residential market by now. However, the explosive growth in the tech sector has created unforeseen demand for residential and commercial product, thus propelling Seattle past the typical slowdown. Experts are closely watching the moves of President Donald Trump as well as federal interest rates to see if they can predict if and when a slowdown might finally hit the Emerald City.

In an interview of  five of the Seattle area’s top venture capital firms,  those interviewed seemed bullish on the general market, number of IPO’s, and funding to the region for 2017. The full interviews can be found here.

TUNNEL/VIADUCT

Early in the year Bertha took a planned maintenance stop and resumed digging on the 18th of January. The Machine has now dug 6,822 feet of its 9,270 foot route.

Also in January, WSDOT began to brief business owners near the viaduct on the potential impact of the viaduct demolition. WSDOT stated that the structure will come down in phases and will last approximately nine months. WSDOT said that a general contractor will be hired by summer of 2018, at which time further details on how exactly the structure will come down will be released.

 

 

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Seattle Office Space News – December 2016

News

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of December 2016.

OFFICE DEVELOPMENTS

At the close of 2016, Seattle’s office development boom showed no signs of a slowdown. Martin Selig’s plans for The Landmark Building at 1015 Second Ave (former Federal Reserve) will have seven new stories of office space creating a total of 223,000 square feet. Selig hopes to start construction in 2017 with a 15 month build time.

Selig also revealed plans this month for the former Firestone Building at 400 Westlake Ave North in South Lake Union. Early renderings show that Selig plans to maintain the façade and add twelve stories of office space, totaling 230,000 square feet. Again, he hopes to start construction in 2017 with a 15 month build time.

In Pioneer Square, Urban Villages Inc. released plans to redevelop the block where FX McRory’s currently operates. The Denver-based company plans to add shops and restaurants in the alley between the Manufacture’s Building at 419 Occidental Ave South and the Westland Building at 100 S King Street and also the Schoenfeld Furniture Building at 115 S Jackson. The alley will receive new lighting and paving to create a more friendly pedestrian experience while the Schoenfeld Building will have one floor added to the structure. Renderings can be found here.

Surprise surprise, this month public records indicate that Amazon acquired another chunk of land in the Denny Triangle neighborhood near their headquarter campus. Amazon affiliate Acorn Development paid $19.2 million for a half block along Seventh Avenue between Blanchard and Bell Streets, directly across from the recently opened Day One Tower.  The site will likely be the location of another new building for Amazon.

Another Seattle tech giant began construction on its new campus on Elliott Bay to the North of downtown. Expedia is swinging hammers to convert old lab space formerly occupied by Amgen into office. Expedia plans to move from Bellevue to the new campus in 2019 and could add up to 1.9 million square feet on the property.

BUILDING SALES

There were no building sales reported in the month of December.

OFFICE LEASES

Not long after its new headquarters opened in Seattle, Bay area based Facebook inked another large lease in the South Lake Union submarket of Seattle. The social media giant will occupy 384,000 square feet along Eighth Avenue North between Thomas and Harrison Streets. The buildings, owned by Vulcan, are scheduled to be completed in the third quarter of 2018.

Amazon continued its expansion spree into December by leasing the Westlake Terry building that Microsoft currently occupies in South Lake Union. The 320,000 square foot building is just one peg in the massive expansion of the E-commerce giant; it is estimated that they will occupy 12 million square feet in Seattle by 2022.

ECONOMY

According to the S&P CoreLogic Case-Shiller National Index, Seattle maintained its status as the nation’s hottest housing market in part due to the ever-increasing tech job growth in the region. Seattle experienced a 10.7 percent year over year price increase to hold on to the top spot in the nation. The Seattle region now has 10 of the nation’s 30 most competitive neighborhoods for house hunters according to Redfin. Another factor adding to the surge in demand was the rise of interest rates, which caused purchasers to rush to close on homes. This resulted in a 30% increase in total sales from this time last year.

The unemployment rate of the Seattle-Bellevue-Everett area was just 3.7 percent in November according to the Washington State Employment Security Department, down from 4.7 percent a year ago. Construction, healthcare, and especially the technology Industry have spurred the drop in unemployment.

Not surprisingly, the Seattle region ranked eighth among the nation’s largest cities for patent awards according to the U.S. Patent and Trademark Office, fueled by companies such as Microsoft, Boeing, and Amazon.

This podcast from Geekwire makes an interesting point regarding the effect on tech workers of large Silicon Valley companies establishing footprints amidst the Seattle area startup scene.  These companies challenge the entrepreneur community as workers weigh the risk of a career at a startup versus a stable and sizable paycheck at a company such as Google or Facebook.

TUNNEL/VIADUCT

Finally, tunnel boring machine Bertha is starting to make its way towards the surface after reaching its lowest point in November, the machine is now about 70% complete with its journey. The final completion date for the project is now 2023. However, not everyone in Seattle is thrilled with Bertha’s progress. Many business owners along the viaduct have claimed loss of income and disturbance from the vibrations, noise, and other distractions that have come with the delayed project.

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