Seattle Office Space News – February 2018


Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of February 2018.


South Lake Union is getting a new biotech building right in Amazon’s backyard. Called Dexter Yard, the project is located at 700 Dexter Avenue N. and will provide 15 stories (515,000 RSF) of lab and office space along with 25,000 square feet of ground level retail. BioMed Realty, who is developing the project, hopes that Dexter Yard will allow new biotech companies to gain a presence in South Lake Union, where only about 2% of all life sciences space is vacant. The project is set to open at the end of 2020, and will feature a large sports field on the property called The Pitch in addition to its office and wet lab building premises.

Also, this article affirms that Dexter Yard will proceed with construction, planning to begin breaking ground this fall despite not having any tenants lined up. This decision highlights the incredible demand for office/lab space in the area. For early renderings of BioMed’s Dexter Yard project, follow this link.


Co-working giant WeWork has leased a remarkable amount of space setting up locations all over Seattle, and is all set to expand further. In February it was announced that they have leased multi-floor chunks of space at 925 4th Avenue, 1411 4th Avenue, and 255 King Street in the Downtown area. They are also planning to lease a new office project in Ballard right on 15th and Market, and will be opening their new WeLive tower in Belltown in 2020.

Oracle continues expanding in Seattle with the recent announcement of their sublease of 160,000 square feet in Russell Investments Center, posting more than 600 open job positions listed in Seattle. Oracle announced in August that it plans to hire 5,000 employees across the US. Oracle seeks to compete with Amazon Web Services and Microsoft Azure with its cloud computing technology, making Seattle a growing center for cloud tech companies. Oracle subleased from Nordstrom and shares Russell Investments Center with Zillow,, and Russell Investments.

After a long search, the Mexican Consulate has finally found its new Seattle home in Capitol Hill. The historic building called Harvard Exit is an old movie theater with planned interior refurbishments. The Consulate employs 35 people who are currently working in cramped quarters in a two-story building on Third and Blanchard in Belltown. The new location would offer them a generous 17,000 square foot headquarters and would bring their business to Capitol Hill’s vibrant neighborhood. Neither the Consulate nor Eagle Rock (the owners of Harvard Exit) have given any particulars on the move.


Business is booming in Downtown Seattle. Since 2010, taxable sales for bars, restaurants, and other retail have increased 50%, and the Downtown area has added 60,000 new jobs. More and more people are moving to Seattle – 22% more in the last 8 years, to be precise. Major public projects and planned or under way, and over 8,700 new housing units will be opened in the next two years. All this construction and development will only further augment the traffic congestion in the Downtown Core.

Today’s average tech worker in the Emerald City is paid $132,000 per year, not including bonuses and other perks. Seattle’s lower cost of living relative to base salary has made it one of the top destinations for relocation amongst tech workers, especially those eager to leave the Silicon Valley (and its insane cost of living) behind.

Office rents in Seattle are rising 2.5 times faster than the national average. Seattle is no longer the “budget option” it once was for startups and established tech companies alike. Seattle is now one of the most expensive places to rent office space, surpassing Chicago and Los Angeles in the last three years. The vacancy rate in Seattle is 5.7%, and Central Seattle has the lowest vacancy rate out of the 10 biggest office markets in the country. Despite (seemingly) endless new construction, rent increases continue to crunch new tenants looking for space.

Winter is traditionally a slower time in the housing market, but Seattle started off 2018 by breaking its own price record. Single-family home prices across King County rose nearly 20% in January compared with January 2017. The increases hit all parts of King County, with prices rising anywhere from 28% to 11% depending on the location. Seattle’s median home price is now $757,000, which is the highest price ever – even higher than last summer.

According to the Northwest Multiple Listing Service (NWMLS), there are only 3,915 houses and condos for sale in King County, which is less than one month’s supply. In a balanced market, the supply would be closer to 4-6 months. While experts forsee a moderate increase in listings and project slower price increases due to rising interest rates, the Seattle area market remains outrageously hot. And King County is not the only county affected: median prices in Snohomish County went up nearly 10%, with Pierce County jumping almost 16%. Kitsap saw a more moderate 3.5% increase in home prices.

Even cities well outside the Seattle area have seen soaring price increases. Washington now has 5 of the 9 hottest housing markets in the US. The median home price on the Eastside is a staggering $938,000, which puts even Seattle’s $757,000 to shame. Even the much “cheaper” areas of Bremerton-Silverdale, Kennewick, Olympia and Spokane have seen home prices rise between 8.2% and 10.5%. However, don’t worry just yet about getting priced out of those markets. Despite increases, the median home price in Bellingham is just $378,000, and $202,000 in Yakima.

There may be a severe housing shortage in Seattle, but construction costs are still rising. Most of the building projects underway are non-residential, and this considerable increase in building is driving up costs. Construction employment flat-lined in 2017, however, which offers a hint of a slowdown regarding rising construction pricing.  Still, the Mortenson Construction Cost Index recommends that owners plan for construction costs to increase by 3.5% to 4% in 2018.

Long-term mortgage rates continue to increase, now making it even more expensive to borrow and purchase a home. The average rate on a 30-year fixed-rate mortgage is 4.43%, and 3.9% on 15-year fixed rates. These increases discourage potential home buyers in addition to encouraging sellers to hold on to their homes. The pace of Americans buying homes fell 4.7% in January, due to increasing home prices, rising mortgage rates, and a severe shortage of housing.

In another twist and potential indicator of a slowdown in Seattle, Amazon has confirmed that about 500 people will be losing their jobs in the Seattle area, though many of those employees will be offered jobs in other departments. These layoffs are due to Amazon’s rapid growth in the last few years, which caused redundancy and budget problems in some departments. Amazon still has over 4,000 job openings in Seattle, but any cutbacks at all are a rarity. Amazon has said that they plan to hire aggressively in some areas while cutting back others, and will likely focus the majority of their new hiring efforts on HQ2 when they finally settle on a second home.


David Bonderman and Jerry Bruckheimer, the would-be owners of Seattle’s new NHL team, indicated in February that the NHL would give them favorable expansion rules to build a team here. They have also indicated that they would be willing to become owners of an NBA team, should that become a possibility. The ball has certainly gotten rolling with the new Key Arena renovation going full-steam ahead. Fans are already clamoring to put down deposits on NHL season tickets!


Is WeWork taking over the world? Well, if the founders had their way, they would. WeWork founder, Adam Neumann, envisions a world where people are brought together within the work environment. Revolutionary concepts like open plans with social areas encourage people to congregate. Sharing a drink together at work is considered a virtuous pastime, as opposed to a taboo, and plenty of WeWork offices have well stocked bars and sponsored happy hours. And work is just the beginning. With concepts like WeLive cropping up in Seattle and elsewhere, Neumann intends to completely reframe the way humans live and work. They are even getting into the early education business. The brainchild of Neumann’s wife, Rebekah, WeGrow will offer early education to children age 3 and up, with emphasis on socializing and entrepreneurship. It may seem wild, but Neumann insists that in order to change the world, you have to be a little wild.

Amazon’s list of HQ2 finalists is getting shorter, and rumors are flying about five locations in particular: Austin, Maryland, Northern Virginia, Boston, and Los Angeles. From Super Bowl ad hints to code names like “Project Golden,” the suspicions abound. However, despite rampant guessing, Amazon has yet to give any concrete evidence about where their new headquarters will be. Read up on these rumors and form your own opinion here.

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Seattle Office Space News – January 2018


Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of January 2018.


There was a good amount of coverage regarding Seattle office developments in the first month of 2018.  PCC Community Markets will be the anchor tenant for Regency Developers’ new project, Ballard Blocks II. The new space is scheduled to open in spring 2019. Ballard Blocks II will be approximately 115,000 square feet and, when combined with Ballard Blocks I, the total square footage will be 265,000.  This will be PCC’s first Ballard location.

The University of Washington has officially opened its new Nanoengineering and Sciences Building. The 78,000 square foot building was designed by ZGF Architects and is part of a larger, 168,000 square foot complex at the center of campus. The building is five stories tall, and includes space for classrooms, learning centers, and 4 floors of lab space. It was designed to reduce the environmental impact of laboratory work, with a rooftop rain garden and phase changing gel in the walls, which responds to outside temperature and regulates heat and cooling within the building.

1818 Fairview Avenue East has been in development for 10 years, and is – at last – under construction. Alexandria Real Estate purchased the project from Washington Holdings when it was called “the Atrium.” Now, after laying dormant and changing hands, the lab/office hybrid project is at last getting off the ground. The project will total 205,000 square feet and have a four-story atrium lobby. None of it has been preleased yet, but Alexandria is in discussions with potential tenants.

Kevin Conroy, owner of the Blue Rooster building in Fremont, is planning a second development with partner Jim Neuburger. The Fremont NorthShore Building located at 1326 Northlake Way, will be about 30,000 square feet and have three stories, ending in a rooftop deck. Bicycle storage, parking and a 2,440 square foot restaurant on-site will round out this new addition to Fremont’s growing office neighborhood. Conroy hopes to have a permit by March, and complete construction within 12 months.

Alexandria Real Estate Equities Inc. has submitted drawings of their new development at 1150 Eastlake Avenue E, which include plans to open a portion of the building with glass and feature a two-story visible “urban forest.”  The building will face the freeway, and this is part of why the architects at Gensler will be designing the transparent walls. The goal is for this urban forest to be visible from the freeway and give the building a unique, tangible presence.


The 112,686 square foot Joseph Vance Building at 1402 3rd Avenue sold for $43.3 million in January 2018. The price per square foot equates to roughly $326/sf.  An entity of New York based Brickman purchased the building from RSGF Vance Building LLC, who previously purchased the building in 2006 for just over $23 million. The sale also included the Sterling Building, which occupies the same property and includes 20,000 square feet. The Joseph Vance Building was recently renovated in 2007 by ZGF Architects and achieved a LEED certification. Building tenants included the Sightline Institute and the American Jewish Committee among others.


Despite Amazon’s HQ2 search, the tech giant is still rapidly expanding in Seattle. Amazon has recently leased two more mid-sized office buildings in South Lake Union: the 162,000 square foot Ninth and Thomas building and the 186,000 square foot former PEMCO headquarters building on Eastlake Avenue. The PEMCO building is small, but incredibly visible as it sits right along I-5 next to the REI building. Amazon will move into both buildings in June of this year. Amazon now occupies over 8 million square feet in Seattle, and has plans to reach over 12 million square feet soon.

Co-working giant WeWork continues to rapidly expand, planning to double its Seattle footprint in 2018. WeWork opened its fifth location in the Seattle area this month, with plans to open three more locations this year. In addition, WeWork’s presence will further increase after it completes its 36-story WeWork/WeLive tower in Belltown and takes two floors at the new 15th & Market building opening in Ballard next year.

Police body camera developer Axon is growing in Seattle, with plans to hire an additional 50 people this year to add to its current headcount of 150. Axon recently leased another floor in the Metropolitan Park West building to supplement its current office and bring their square footage up to 32,000. They now have room for up to 210 employees, which will cover their current hiring plans for this year. Axon reports that as of Q3 2017, 38 of the nation’s 68 largest city law enforcement agencies have bought their body cameras or use its other services.

Accenture and Avanade, a subsidiary of Accenture, will be moving from their current Denny Triangle location to a new headquarters space in the Second and Seneca building. The companies have leased the first three floors of the building, giving them a total of 61,000 square feet and a new hub of regional and international operations. The move is scheduled for this fall and will affect around 2,100 employees. The new space, which is being designed by Gensler architects, will be “a forward-thinking, human-focused space that really does lean on technology” according to Gil Wooton, Accenture Managing Director.


Amazon published its list of HQ2 finalists in January 2018, narrowing the choice down to 20 cities across North America. Several other Puget Sound cities applied to Amazon, but none made the cut. It appears that Amazon is truly interested in moving out of the region and exploring new territory.

Amazon and the City of Seattle are set to meet and discuss their relationship in early February. While plenty on the council are eager to keep the tech giant here and happy, GeekWire recommends avoiding financial breaks to companies like Amazon and Microsoft, and instead integrate their capabilities into the City’s inner workings. Suggestions include blending Amazon Alexa into law enforcement as a voice assistant to cut down on notation time during crimes/emergencies in progress, spearheading the integration of augmented reality, and upgrading/implementing 311 and next-gen 911 capabilities.

It’s been 15 months, and Seattle remains at the top of the housing markets in the country. According to the latest report, Seattle home prices rose in November 12.7% over the same period a year ago, more than double the national average of 6.2%. The average cost of a home in Seattle is now $718,700 according to Zillow. Zillow also reports that prices rose 16.2% over the last year, though they expect that rate to slow to 5.7% over this next year.

The recent drop in housing price growth rate could be largely caused by the new federal tax code revisions recently signed into law. Windermere Real Estate Chief Economist Matthew Gardner expects that Puget Sound sale prices will rise by 7.6% this year, and King County rates will rise by 8.5%. Under the new tax law, mortgage interest rate deductions will be capped at $750,000, down from $1 million. While this is largely viewed as a tax on wealthy households, some of this effect will be felt in Seattle, though major targets of this law will be in the high cost markets of California, Hawaii and New York.

Seattle traffic was bad, is still bad, and is about to get worse. The Emerald City has reached what experts call the “period of maximum constraint” in terms of the number of people attempting to navigate the Seattle city center. From now through 2021, the already-crowded city center is going to get even tighter, with a number of projects designed to increase accessibility reducing it instead – at least until those projects are complete. Dozens of cranes dot the city skyline and over 110 buildings are proposed in the near future, which will result in lane closures and sidewalk detours. A full write-up of all these projects, their effects, and timelines can be found here.

Month-over-month apartment rental rates have shown a decrease in Seattle, though experts are torn on whether this decrease is relevant in the long term. Rents have declined in Seattle 1.4% in the past month, though are still up 3% year over year. Dylan Simon, a broker at Colliers, says that rents are always lower in the winter months along with higher concessions. Still, even allowing for the normal seasonal slowdown, rent growth is still significantly slower than it has been in previous years: 3% in 2017 as opposed to 4.9% and 5.8% in 2015 and 2016 respectively. It is likely that the decrease is due to Seattle’s increase in multi-family housing options and the seasonal decline.

Despite the signs of a booming economy here in Seattle, the metro area has dropped out of the Mulken Institute’s Top 10 Cities ranked by economic growth. However, the entire region, which includes Bellevue and Everett, still ranks 17th in the nation. Recent aerospace layoffs at Boeing and Rockwell Collins are reducing economic diversity. However, the Puget Sound’s thriving tech sector, most notably its cloud computing industry (Amazon and Microsoft) is bringing high paying jobs to the area and creating a highly educated labor pool to fill demand. However, increasing housing costs as well as business costs have caused some companies to move outside of large city centers like Seattle, San Francisco and San Jose.

Seattle ranked second among the nation’s 20 largest metros in small-business job growth in a report by Paychex/HIS Markt Small Business Employment Watch. The state of Washington also ranked second in small business job growth, behind Tennessee.

It’s no surprise that Seattle is getting denser, but that density applies to more than just new office towers. Residential construction has largely followed office construction this year, with the majority of new homes and apartments being built in urban centers and urban villages. The goal is to reduce the need for residents to drive to work, instead living within walking, biking or bus distance to their place of employ. Developers have been closely watching Amazon’s leasing and purchasing patterns, erecting housing near these new employment centers in South Lake Union, the Denny Triangle, and First Hill.

With all this new development, it may come as a surprise that our crane count has actually dropped by more than a fifth, coming down to 45 from 58 six months ago. The all-time high was 62 cranes in the last half of 2016. However, Seattle still tops the nation in cranes, though Toronto beats out even Seattle with a staggering 88 cranes.


The ink is dry on Oak View Group’s deal with the city for the renovation of KeyArena, but apparently the idea of a SoDo arena isn’t dead yet. Mayor Jenny Durkan gave hope to SoDo arena fans, saying that the idea of two arenas isn’t completely out of the picture. Chris Hansen still needs the city to vacate the street where he wants to build the area, and with new people on the City Council, the vote could go either way.

An attorney for Oak View Group has registered 13 different internet domain names for potential Seattle NHL teams. Some of the suggested names included the Seattle Sockeyes, Seattle Krakens, Seattle Totems, and Seattle Seals.


The Highway 99 tunnel could be ready to open this fall, according to the latest schedule. The builders are forecasting October 25th to finish construction. However, the state needs an additional three to five weeks to connect ramps at the Sodo and South Lake Union entrances. This new projected opening date is sooner than the previous January 2019 estimates, though it’s still three years behind the original goal of late 2015.


Here is a 4-minute time lapse video of the last three years in Seattle, showing the massive increase in development that us locals have been witnessing. The compressed time period makes Seattle’s boom look almost comically sudden, but it truly hits home on how much the city has grown, especially areas like Denny Triangle and South Lake Union. The images were taken from a panoramic camera installed on the top of the Space Needle. Full video here.

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Seattle Office Space News – December 2017


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


Wright Runstad broke ground on the massive Rainier Square development at 4th & Union in downtown Seattle in December 2017.  Rhine Demolition is using four excavators to tear out the old retail below the pedestal of Rainier Tower. The shops will be replaced by the 58 story building that will have 722,000 square feet of office space leased by Amazon on the lower floors, and 200 luxury apartments on floors 41-58. While the current retail space at 1301 5th Avenue is gone, the first two levels of the new Rainier Square tower will have 79,000 square feet of retail, amenity and fitness center space including an organic food market. Wright Runstad expects the tower to be finished in the summer of 2020.


8th + Olive sold for $185.9 million in December, passing from 720 Olive Way Venture LLC (an entity of Talon Private Capitol) to PPF OFF 720 Olive Way LLC (associated with Morgan Stanley). The building, located at 720 Olive Way in Downtown Seattle, just underwent a $12 million renovation in 2015 after Talon acquired the property in 2014.  Talon purchased the 20-story building for $101 million in 2014 when it was four-fifths occupied with CHP of Washington who was set to move. After a massive renovation complete with all new elevators and a beautiful lobby, the building is now fully leased to online legal services company Avvo, along with Airbnb and Coupang, a Korean online retailer.

Off Center LLC has sold the Shilshole West office building in Ballard for $7.1 million, after paying $6.2 million for the property in 2014.The buyer was Shilshole West LLC, associated with a private investor in Kirkland. The six-story building is just under 40,000 square feet and was built in 1997, and is reportedly fully leased.


Internet retailer Coupang, the “Amazon of Korea,” leased 47,000 square feet at 8th + Olive in December. The company leased three floors with space for up to 350 employees. Coupang already employs over 100 people here in Seattle, and is looking to hire more. The company was founded in 2010 and has raised more than $1.4 billion.

Also, Cascadian Therapeutics has subleased a large portion of space from CTI BioPharma Corp at 3101 Western Avenue. The 52-month lease starts January 1, 2018 and gives Cascadian 44,000 square feet on two floors of the Belltown building.


With Amazon pursuing it’s “HQ2”, there has been much hand-wringing and worrying about the potential economic effects of Amazon turning its gaze elsewhere. But, two top experts dampened the fires of panic by weighing in on some of the potential upsides of an Amazon power vacuum. Heather Redman, Co-founder of Flying Fish Partners and chair of the Seattle Metropolitan Chamber of Commerce insists that diversity of business is helpful. By seeing that Seattle is “open for business,” new tech firms could fill any gaps created by Amazon’s potentially decreased presence. Matthew Gardner, chief economist at Windermere Real Estate, agrees. He states that without Amazon immediately grabbing every new square foot of office construction, a desirable slowdown in rent increases could occur. And with less of a footprint, housing demand may slacken a little as well – something he would “not be unhappy about…whatsoever.”

Despite these calming opinions, the Seattle City Council has reached out to Amazon in December seeking to “hit the refresh button” on its relationship with the tech giant. Amazon responded, seeking to schedule a round table discussion in January. The issues of “mixed messages” sent to Amazon about the community of Seattle – and how welcome Amazon is in the city – will likely be addressed.

In another interesting indicator, Amazon ended the year with 3,500 job openings posted in Seattle, and that has some people worried. While the number sounds astronomical, it is down more than half from June 2017, where 9,000 jobs were listed for Seattle HQ alone. Amazon’s current listings are the lowest since 2014, petering out after a massive hiring binge that has lasted several years. While it may seem that Amazon’s appetite for employees is endless, it isn’t. With their new HQ2 search in the works, Amazon will likely seek to hire and fill needs in their chosen second home. Also, the internal news of hiring freezes/postponements, reorganizations to reduce redundancy, and cuts in travel fees speak to the need for Amazon to come to terms with how all their new hires will fit into the company. Whether these are simply normal fluctuations or the beginnings of a new trend for the company remains to be seen.

Despite the wintry weather and holiday season, home sales didn’t slow down in Seattle in December, which is sending housing prices through the roof. Sales of single-family homes went up 3.3%, and in King County, the median home price jumped 15.6% to $575,000 (including condos). Still, winter is the best time to buy, with less competition and sellers motivated to close out the year with a sale. The tax bill moving through Congress could also be a factor in the increase of home sales during the holiday season. Some real estate professionals have expressed concern that the tax bill would reduce or eliminate home owning incentives, which in turn could decrease the desire to own vs rent.

The single-family housing market may be hot, but the condo market is even hotter. Seattle faces a severe condo shortage compared to other large metropolitan areas, and this decrease is shooting the average condo price through the roof. In Seattle, the median condo price is now $453,000. Only 350 condos are available for sale throughout the entirety of King County, and it doesn’t seem likely to change any time soon. In Seattle, 94% of the housing units coming down the pipeline are apartments for rent.

Seattle’s endless climb in housing costs has landed it in the top five most expensive cities for renters. The median rent reached $1,448 in 2016, and all trends point towards further increases. Across Lake Washington in Bellevue, the median rent is a staggering $1,846 per month. And for the first time ever, Tacoma has hit the “$1000 Club,” with the median rent now $1,045.

With rental rates reaching all-time highs, the issue of rent control – long banned in Washington State since 1981 – is starting to become a viable possibility. State Representative Nicole Matri, D-Seattle, plans to introduce a bill in the upcoming session to repeal this ban on rent control. This bill will be the first attempt to overrule the ban since 1999. Despite most bills of the sort being deemed as doomed on arrival in Olympia, the housing crisis is worsening not just in Seattle, but across the state.  For the first time in years, Democrats will control the Legislature during the 60 day session starting in January. Some see it as an opportunity to push for rent control, while others warn that it will do more harm than good in the long run.

Finally, President Trump’s desire to curb immigration stems from a desire to help the America people and boost the economy. But KoKo Huang, an attorney at Jackson Lewis P.C. in Seattle, argues that it could actually weaken our region. It is no secret that Seattle has become a top destination for tech talent and startup growth, and plenty of those founders and entrepreneurs have been immigrants. In the Seattle area alone, immigrant residents total around 614,000 and paid $6.5 billion in taxes in 2014. Some of the most iconic startup companies in Seattle have been founded by immigrant entrepreneurs, such as Stripe, eBay and SpaceX. Under Trump’s immigration changes, Huang argues that immigrant entrepreneurs will leave or avoid Seattle, hurting our overall economic growth and significantly reducing our workforce.


Seattle’s KeyArena, former home to the Seattle Supersonics, is officially getting a facelift. Early in December, the Seattle City Council approved a plan to let Oak View Group spend $600 million to renovate the aging event venue. The development will nearly double the size of KeyArena to 680,000 square feet and will create capacity to seat 17,000 for hockey games, 18,350 for basketball games and as many as 19,100 for concerts. Oak View group has been focused on acquiring an NHL franchise and turning KeyArena into a world class NHL and concert facility in the hopes of eventually also attracting an NBA team back to Seattle.

Tim Leiwicke, head of Oak View Group, addressed various topics revolving around the KeyArena renovation at the GeekWire Sports Tech Summit this past summer. Some of his plans include streamlining transportation around the new arena, engaging with companies like Activision Blizzard, and improving spectator security through the use of technology like facial recognition and drones.

Oak View Group will fund the entire project, and their 39 year lease comes with two 8 year renewal options, totaling 55 years. The agreement between Oak View Group and the city includes many benefits to the city, from relocations of Seattle Center tenants (and their reintegration post-construction) to a $20 million Community Fund, with $10 million dedicated to YouthCare.

Finally, it seems like the agreement between Oak View Group and the city of Seattle couldn’t come at a better time, because National Hokey League Commissioner Gary Bettman has reported that the NHL Board of Governors is willing to accept and consider an expansion team application from Seattle. The application fee is $650 million, but Oak View Group is already planning to conduct a season ticket drive and collect deposits to show Seattle’s eagerness to have the NHL return to the Emerald City. There is already rampant speculation over the potential new team’s name, and NHL fans through the Puget Sound are excited about this new prospect.

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Seattle Office Space News – November 2017



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


November brought news of Amazon’s newest high-rise, 2205 Seventh Avenue, which is being designed with an “urban treehouse” theme. The site, Block 18, is being designed by Graphite Design Group and will have 388,000 square feet of office space and 8,800 square feet of retail. The top floor deck will be available to all tenants, and the building will also have collaborative gathering areas called “birds’ nests.” More pictures can be found here.

Also, Life sciences developer BioMed Realty showed off their new plans for 700 Dexter, a new life science campus in South Lake Union. The 500,000 square feet of office space is being designed by SkB Architects, and will be split between two 14-story buildings, each one connected by a double-decker sky bridge.


There were no reports of office building sales in Seattle in the month of November 2017.


Uber may reign supreme in Seattle, but the competition is starting to heat up. Lyft signed a lease for 19,616 square feet at the 83 King building, adding to the 19,000 square feet they already occupy in the National Building. The ride-hailing company is currently hiring for a variety of positons in Seattle, and now has the room to add 200 more non-driver employees to its current 110. Lyft’s sales are growing faster than Uber’s, but despite this headway Uber still leads the market.

Spaces, a subdivision of the co-working company Regus, opened their first Seattle office with 60,000 square feet at 450 Alaskan Way in Seattle’s Pioneer Square submarket. The ever-growing number of co-working companies flocking to Seattle has experts predicting the total co-working square footage to double to over 1.3 million square feet in the near future.

Meanwhile, Nordstrom continues to offer more and more space up for sublease. The retailer has recently put 177,000 more square feet on the market at Russell Investments Center, which is located about five blocks from the Nordstrom flagship store. Nordstrom now has over 300,000 square feet available for sublease at Russell, some of which has already been subleased by Oracle and Indeed. Nordstrom insists that the release of space has nothing to do with financial troubles, and instead stems from a desire for consolidation of personnel. Regardless, Nordstrom is giving up more than a fifth of their downtown Seattle office space.


People often talk about how Amazon’s growth has affected rents in Seattle, but a new report from Zillow has officially quantified the tech giant’s impact. Seattle rents have increased by an average of $0.11 per square foot per year since 2011. And about $0.07 of that increase is due to what Zillow calls the “South Lake Union jobs boom.” New jobs means more people, and more people drives up demand – and rent. Zillow discovered a relationship between the number of SLU employees in a neighborhood, and larger rent increases.

In a new quarterly report from, the study found that the average prospective buyer needs an $11,000 pay raise just to afford a typical mortgage. Households need an income of $93,400 per year to afford monthly house payments in the Seattle metro area, up from $82,000 only a year ago. Down payments are also increasing, putting pressure on some to buy now before costs get too high, or simply pricing people out of the market entirely.

Downtown Seattle’s skyline may be looking increasingly crowded these days, but developers continue to erect apartment towers despite the squeeze. Skanska recently paid $21.6 million for a property in Belltown, which will eventually become a 346-unit apartment tower. Multi-family housing keeps popping up, but the demand is still outpacing supply. Seattle continues to add jobs, and the record appetite for office space in the city sends a clear message: people working in Seattle need to live somewhere. Skanska’s Executive Vice President, Murphy McCullough, says that even though it’s hard to believe, the market still isn’t building enough apartment buildings.

Many of Amazon’s office leases are coming to a close in 2019, but John Schoettler, vice president of global real estate, insists that many will be renewed. Amazon’s future space needs are up in the air, but for the foreseeable future, Amazon will be a major leasing tenant in Seattle and also Bellevue.

All these rapid changes in the market have resulted in some mental turmoil in the Seattle area. A recent poll regarding the direction of Seattle’s growth reflects a mixed opinion – pessimistic in some regards, optimistic in others. 70% of people believe that the region’s growth benefits only a few, but 69% also believe that the Puget Sound region is moving in a positive direction. Just over half of those asked think that the region is becoming “world class,” but only 38% believe that their quality of life has gotten better.


The Seattle City Council is just about ready to approve Oak View Group’s bid to renovate KeyArena. The vote will be on December 4th, right after a memorandum of understanding (MOU) with Chris Hansen expires. If the vote passes, the City will sign a 3-year MOU with Oak View Group. The project’s overseer, Lance Lopes, revealed some details of the timeline and goals of the arena renovation, including budget, parking concerns, and whether or not the NBA will decide to move back to Seattle.


The new Highway 99 tunnel is over a year away from completion, but the lower deck is now being built out. 1,152 concrete panels will form the lower deck, a different construction than the tunnel walls and upper deck, which were cast in place.

A Geekwire article has taken an even deeper look into the future home of Highway 99, riding through the tunnel before its completion. For more pictures and a narrative exploration, read on here.


Our shifting work landscape continues to move away from the linear efficiency-focused model of past decades, and towards a creative, flexible model that encourages expression, fluidity and innovation. The office environment can be set up in a way that fosters creativity and empowers employees, 87% of which seek creative, forward-facing companies (according to a 2016 Gallup poll).

Wood-products company Weyerhaeuser has won NAIOP’s “Office Interior of the Year” award for its innovative, re-purposed headquarters in Pioneer Square. Images of Weyerhaeuser’s space and the other finalists can be found here.

Finally, Launch Pads takes a look inside Hulu’s dynamic tech space at Fourth & Pike, which runs 24-hours per day to monitor Hulu’s growing host of apps. A closer look at Hulu’s office can be found here.

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Seattle Office Space News – October 2017


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


Construction officially began at the Rainier Square site in October, which when complete will have 722,000 square feet of office space and 58 stories leased to Amazon. The University of Washington currently ground leases the site to developer Wright Runstad for $413,000 per year until the tower is completed, and just over $1.65 million per year after completion.

Troy Block, also occupied by Amazon, formally opened this month – just days after the announcement of Amazon’s full building lease at the new Rainier Square site. The 800,000+ square foot Troy Block, combined with the 722,000 square feet at Rainier Square, is slightly larger than that of Columbia Center, Seattle’s largest office building. Speculation on whether or not Touchstone, Troy Block’s developer, will sell the building has neither been confirmed nor denied by Touchstone officials.

Skanska has poured the foundation for 2+U, its new 38-story office tower, in an endeavor that took 23 hours and 11,000 cubic yards of concrete. The foundation, which is 40,000 square feet total and 12 feet deep, includes 2.8 million pounds of reinforced steel and began pouring at 2 AM on September 30th, stretching through the day and well into the night. The tower is scheduled to be complete in Q2 of 2019.

Down on Fifth Avenue and Marion Street, Madison Centre has officially opened its doors. The gorgeous multi-tenant office tower, developed by Schnitzer West and Barings LLC, was built to recruit exceptional talent through location and amenities. Officials are tight-lipped on the cost of the building, but it’s estimated to be around $430 million. A first look at the new tower can be found here.


Unico Properties bought World Trade Center North from an entity of TIAA for $65 million. It had previously sold for $71 million in 2007, making this newest sale 8% less than when TIAA purchased it. The five-story 133,177 square foot building is one of three built on Port of Seattle land. WTC North is currently 75% leased, housing PMI, Comtech TeleCommunication Systems and Stanley Thermos.  According to Unico officials, the building was bought with the expectation that the Pike Place waterfront area is about to go through “a dramatic transformation,” and they are eager to integrate the property into this new waterfront.


Wright Runstad has said that construction will begin at the new Rainier Square development, after officially confirming that Amazon will be taking the entire office portion. The Amazon deal is the largest single lease in Wright Runstad history, and the skyscraper is the largest they have built. The mixed-use skyscraper will contain 200 luxury apartments and retail space in addition to the 722,000 square feet of office that Amazon will occupy.

While Amazon remains king in Seattle, Oracle is also boosting its presence in the Emerald City with a lease of 167,000 square feet at Russell Investments Center. In addition, Oracle is also taking 10,000 more square feet at Century Square, its current location. Oracle is seeking to broaden its cloud business, planning to hire over 5,000 engineers, sales and support people, in an effort to compete with Amazon and other cloud based companies.

The top six floors of Starwood Capital Group’s Macy’s building on Third and Pine have officially been leased by Amazon. The 475,000 square feet of office space will fill Amazon’s ever-growing space requirement in the downtown core while they wait for Rainier Square to open in 2020. This historic building once housed Macy’s on all seven floors, plus the basement, but the retailer has now shrunk to just the basement and ground floor.

Co-working company Thinkspace has leased 20,000 square feet in the Lake Union Building, hoping to open up space for tech startups next year. Thinkspace’s new location will include shared space, co-working, meeting rooms, event space, and even a lake view balcony overlooking Lake Union. The new office will do a soft opening in February or March of next year, and its theme is “grit and resilience,” fostering an environment where startups and entrepreneurs can push their limits and achieve their visions.


Seattle remains the nation’s hottest real estate market, shattering yet another record this month and maintaining its title as the nation’s top market for an entire year. The rate of growth in home values rose 13.2% from last August, more than double the national rate of 6.1%. Seattle is now the fastest-growing big city in the country, adding 57 people a day on average to the swelling population. This influx of people hints at a tech company exodus from San Francisco, whose housing market is growing at half the rate of Seattle.

Despite the intense housing market, millennials are not “giving up” on buying a home. The Zillow Group Report states that up to 42% of people looking for a home are looking to buy their first. The typical news characterization of the forever-renter millennial is unfounded, as plenty millennials still see real estate as one of the most valuable investments they can make.

Home prices aren’t the only things that are rising in Seattle, however. Wage growth is also growing fast, and Seattle lead the country in growth for human resources, finance and food service jobs. Wages increased 2.1% from last October, and Seattle’s median base pay is $60,333 per year – though it lags behind San Francisco’s $68,023. More information on the fastest growing wages can be found here.

Aside from Seattle’s rising home prices and wages, the bustling restaurant scene here is facing a staffing crisis. With housing prices skyrocketing, many employees are moving further and further away from the city center, resulting in incredibly high rates of turnover for both front and back of house staff. Restaurateurs gathered at a panel hosted by Yelp to try and address these concerns, suggesting strategies to recruit and retain talent. Stronger leadership in the kitchen and the ability for employees to set more flexible work schedules were just two of many potential solutions to this daunting problem in the Seattle restaurant industry.


The City of Seattle may be moving forward with their plans to partner with Oak View Group on the KeyArena renovation, but Chris Hansen’s group isn’t done yet. Hansen, who is trying to get a new area built in SoDo, has begun a campaign to make the KeyArena project public instead of private. This tactic, which had been used against Hansen in previous years, would delay the environmental-impact statement (EIS) and force the city to consider alternative sites. This could very likely push the city and Oak View Group over their deadline to complete the project in October 2020. While Hansen has claimed he does not intend to litigate against the KeyArena renovation, the stage is set for a potential legal challenge on the KeyArena project.

In addition to this potential legal battle, Chris Hansen’s land use lawyer, Jack McCullough, has challenged the city council’s assertion that the SoDo arena plan hasn’t been resubmitted due to Hansen’s failure to respond to transportation department emails. The city claims that emails were sent out last March and April, but nothing is mentioned on whether or not those emails were received, or to whom they were sent. It is estimated that it would take Hansen’s group and the transportation department three to four months to complete the required presentation to allow the SoDo project to move forward in attempts for approval.

Despite delays and deterrents, Hansen and his group continue to push for a SoDo area, going so far as to champion a two-arena setup with KeyArena downsizing to a concert venue, and the SoDo location hosting an NBA team. He plans to be “in it to the end” despite being the obvious underdog at the most recent city council hearing. Only time will tell whose plan will ultimately win approval, but both sides of the aisle are eager to court the return of an NBA franchise to Seattle.


Construction began on Seattle iconic Space Needle, with architects Olson Kundig releasing a series of images highlighting the changes to the Needle’s restaurant and observation deck. One of the main highlights? A rotating restaurant full of glass: glass tables, glass chairs, and glass floors that showcase the jaw-and-stomach dropping 500-foot elevation. More photos can be seen here.

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Seattle Office Space News – September 2017


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


September brought news of Amazon continuing the expansion of their high-rise campus in downtown Seattle after it received a permit to begin excavating the site for its fourth tower block. The planned development includes a 24-story building at Eighth and Bell and an 8-story building at Seventh and Blanchard, connected by an elevated walkway. Graphite Design Group will take over architectural design for Block Four, which at completion will contain 835,000 square feet of office space and 26,000 square feet of ground level retail. While not unexpected, Amazon’s continued expansion in Seattle brings calm to initial worries after the tech titan announced its search for a second U.S. headquarters location this month.

Skanska USA submitted a proposal to put a new office building at 318 Fairview Avenue North in South Lake Union – a site which currently houses the SLU Streetcar barn. The development proposes that Skanska quickly build a new streetcar barn and parking structure beneath an 11-story office building at the site, leasing the barn to the city for $10 per year. Since the project must be finished before the new streetcar line arrives at the barn (2020 as current estimates go), Skanska hopes to streamline the project by skipping parts of the normal review process. However, Skanska’s proposed deal also includes the acquisition of two independently owned parcels directly south of the barn, which could slow the process significantly.

Trinity Real Estate and a private Seattle family paid $15.8 million for 6 of the 11 floors at the Seaboard Building this summer, and are planning an upgrade and renovation to both the retail and office portions of the building. The space, which totals nearly 58,200 square feet, will be brought into the 21st century with modern finishes and expects rental rates to be $41.00 per square foot, fully serviced.

Martin Selig’s new project at 3rd and Lenora begun shoring and excavation work in Belltown. The 36-story building will feature 365 residential units in addition to 176,000 square feet of office space and 5,500 of retail, both operated by WeWork. In addition, five levels of garage parking beneath the building will provide 221 stalls to tenants and residents. The tower is scheduled to open in the spring of 2020.

The Ainsworth and Dunn Building, long known as The Old Spaghetti Factory, is ready to begin its redevelopment project. The historic 1902 site will now be turned into 32,377 square feet of office space by Meriwether Partners, adding a third story and a roof terrace, with a pedestrian walkway between the A&D building and a new apartment building directly south. Construction is set to be completed in 2019.


Two more floors in the Macy’s Building at 300 Pine Street have sold. The deal was announced in June, but the buyer has now been released as an LLC related to Starwood Capital, who already owns floors 5-8. The two new floors, 3 and 4, add another 160,000 square feet to the available space, bringing the total availability at 300 Pine to 460,000 square feet.

A Blackstone Group entity has purchased the Exchange Building from Beacon Capital Partners for $156 million ($523 per square foot). The 299,000 square foot Art Deco landmark building was recently renovated prior to the sale, earning a LEED platinum certification and new amenity facilities. At the time of its last sale in 2013, the building was about 77% vacant. Now, it has only 37,011 square feet available, a mere 12% total vacancy.


An outside source has reported to GeekWire that Amazon is set to sign leases at four new locations, totaling more than 1.5 million square feet. 300 Pine, the new Rainier Square development, 9th & Thomas and the former Pemco headquarters will all house the online retailer, who shows no sign of slowing down in Seattle despite recent “HQ2” news.

Co-working giant WeWork continues to grow, opening another Seattle location at 1099 Stewart Street, or Hill7, in the Denny Triangle. This new office is WeWork’s fifth location in Seattle, with plans to move into two other locations throughout the city in the next several years. The company recently raised $4.4 billion from SoftBank, and has 160 locations in 16 countries.


In the biggest news of the month, Amazon shocked Seattle by announcing that they are looking to open a second headquarters in the US that would house over 40,000 employees. Dubbed “HQ2,” this new headquarters search has sparked a huge bidding frenzy throughout the country as cities court the tech giant.  Some wonder whether or not Amazon’s new headquarters could slow or stop Seattle’s rapid housing and development boom, which has largely been driven by Amazon’s epic appetite for office space.  However, despite hand-wringing over the fate of the market, Amazon board member and venture capitalist Tom Alberg insists that Amazon will continue to grow in Seattle.  This sentiment was also echoed by Vulcan Real Estate President Ada Healy and real estate developer Martin Selig. Both business leaders insist that the boom is showing sign of slowing down. Indeed, Healy thinks that Amazon’s second headquarters could take some pressure off the market and let everyone “take a bit of a breath,” opening up room for smaller tech companies to grow and operate.

Seattle’s housing market continues to be red hot, with more than half of Seattle homes sold in July fetching more than the listing price.  Indeed, it’s a seller’s market out here; GeekWire reports that Seattle is among the top US cities for sellers to get the best return on investment. In 2016, Seattle sellers gained on average 53.1% or $185,000 on the sale of their home in which they lived for approximately 9 years. The return on investment for sellers doesn’t seem to be slowing, with King County home prices surging 18% in the last year alone. In southeast King County, prices have increased even higher at 20%, and Shoreline jumping an enormous 33%! Seattle has topped the nation in home price growth, nearly double that of any other US city, and has continued to claim the title of Nation’s Hottest Housing Market for the 11th-straight month.  Much of this steep increase is due to the large lack of supply in relation to demand, with the Seattle area home inventory hitting its lowest point in 10 years.  As prices rise, mortgage lenders are becoming more lenient, making it easier to purchase a house. Fannie May and Freddie Mac are loosening some of the strict standards developed after the housing crisis in the mid-2000’s to encourage homeownership.


Oak View Group has set a proposed completion date for their Key Arena renovation, planning to spend $600 million to renovate the area by October 2020. The LA-based group plans to commit $40 million to improve traffic, transport and parking in the area. Both sides are hopeful that the draft Memorandum of Understanding (MOU) is approved by December 31 of this year.


The Seattle Space Needle is officially getting a makeover. The $100 million project is now underway, though there is no official end date and is expected to last for multiple years. The SkyCity Restaurant has closed, but is set to reopen in June 2018. The Needle’s observation deck remains open to visitors.

Biotech company Juno Therapeutics has taken matters into its own hands and built itself a custom headquarters in South Lake Union. The building at 400 Dexter Avenue has 176,000 square feet of office and 65,000 square feet of lab space over 9 stories. A full gallery of images can be found here.

Now that Bertha has been officially dismantled, the new post-viaduct waterfront has started to become more reality than dream. New drawings and concepts for the waterfront show naturalistic landscaping, artistic glass-and-steel kiosks and inventive walkways. More information can be found here.

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Seattle Office Space News – August 2017


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



Two new proposals for large Seattle office developments emerged this month. BioMed Realty out of San Diego plans to build a two tower, 14-story building on the block of 700 Dexter Avenue North. The project is still in early stages but has listed an early design meeting with the city, and is planned to have nearly 350,000 square feet of office space. The second development revolves around the old Pemco headquarters campus off of I-5. Unico Properties is in early plans for a six-to-eight story building on the site at 330 Yale Avenue North. Amazon is reported to have leased the old Pemco main building, which has just undergone a new paint job complete with Amazon orange detailing..



In this month’s largest acquisition, Clarion Partners bought Tableau Software’s new headquarters, NorthEdge, for $157.85 million. The New York-based company purchased the four-story building from Touchstone and AIG Global Investment group, adding the brand new location to their portfolio of Puget Sound properties. Tableau inked an 11 year lease with Touchstone before the building sold, with two 7-year extension options.

Also, one of Seattle’s oldest commercial brick buildings at 1012 First Avenue sold again this month for $15.5 million just three years after being purchased for $4.3 million. The once ill-reputed location is a perfect example of the power of renovation and new tenant affiliation. The building is now home to Cone & Steiner General Store, office tenants on the upper floors, with trendy boutique Moorea Seal set to move in soon.



Amazon is showing no signs of slowing down in its endless Seattle land grab. The ever-growing tech giant is now close to leasing the entire office portion of the new high-profile Rainier Square project in downtown Seattle. The project includes 52 stories of office along with 12 stories of hotel, totaling 710,000 square feet. Construction on the new building is set to begin in the next few months.

Fast-growing Seattle startup Outreach has moved its headquarters into a former Tableau building in Fremont. The 26,000 square foot space is located on the ground floor of 1441 North 34th Street, and gives the company the room it needs to house its ever-expanding headcount.

Female-focused co-working space The Riveter has leased its second location less than six months after opening its first location in Capitol Hill. The company, which won this year’s GeekWire “Newcomer of the Year” Award, has leased new space on North Northlake Way in Fremont. After raising a $760,000 seed round earlier this year, The Riveter is riding their success with further plans to continue its growth. Their new location is officially set to open on September 11.



Amazon now occupies 8.1 million square feet in Seattle – as much as the next 40 biggest companies combined. The tech company’s success has turned Seattle into America’s largest “company town,” drawing talent from across the country and rapidly changing the face of the city. Even with this enormous footprint, Amazon isn’t done. Within the next five years, Amazon is set to occupy over 12 million square feet in Seattle.

Construction costs in Seattle continue to climb, though two new reports indicated that the market may be slowing down. Component costs and construction employment have finally leveled out this quarter. Still, the remainder of 2017 is set to see overall construction costs increase another 3.5 to 4 percent.

As summer winds to a close, the Seattle housing market has remained red-hot, leading the nation in home price growth for the last ten months.

The Seattle area now has 38 “$1 Million Dollar Neighborhoods.” According to GeekWire, this Zillow criterion requires at least 10% of homes in a zip code to be valued at over seven figures. This news puts Seattle amongst the top hottest markets in the US.

The median home price in the Seattle area is $450,900, having risen almost 13% in the past year. At the peak of the housing bubble before the Recession, it was $380,200.

These skyrocketing prices, however, are not indicative of a bubble economy according to Zillow experts, as they are being caused by a lack of supply and a sharp increase in demand.  The report suggests increases are not infinitely sustainable, and have already showed signs of slowing, especially in the higher end market.



The giant tunnel-boring machine Bertha has officially been completely dismantled and removed. Cranes lifted the final pieces out at the end of August, bringing an end to the journey that began over four years ago in 2013. Now, crews can continue working on the the new double-decker freeway. The tunnel is estimated to open in 2019. You can watch a video of Bertha’s final disassembly here, and a time-lapse of the entire dismantling process here.



The KeyArena renovation project is in first position for approval, with the Memorandum of Understanding (MOU) for the project due on September 12th. Oak Venture Group and the City are hopeful that they will have a final deal achieved before the year’s end, and that KeyArena will be properly renovated for NBA and NHL use.

However, Chris Hansen’s group is still fighting to keep their SoDo stadium project alive. A recent study claimed that the SoDo project would provide 3 times more tax revenue than a KeyArena renovation, though it failed to take into account opportunity costs of each project. Hansen’s SoDo stadium is likely a long shot, especially with the Port of Seattle so avidly against another stadium in the SoDo district, and his MOU depending on the acquisition of an NBA team. However, it’s still too early to tell whether or not the project is officially dead.

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