Seattle Office Space News – November 2016

News

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

OFFICE DEVELOPMENTS

Several large technology office buildings were completed in November. The first was Tableau Software’s 208,000 square foot NorthEdge campus near Gas Works Park in Fremont. In addition, Amazon opened the second tower of their newest development in downtown Seattle. The 36 story high rise opened just eleven months after the first 36 story building to the north opened to employees.  Amazon also started construction on a third tower in November that will include a 37 story building totaling 1.1 million square feet of office at Westlake and Lenora.  Together with phases one and two, the E-commerce giant will have nearly 3.3 million square feet of newly developed space in the Denny Triangle area to go along with their original campuses in the South Lake Union submarket.

At the Southern end of Seattle, American Life is moving closer to completion of the Avalara Hawk Tower. Construction crews are working on floor 16 of the 18 floor office building totaling 186,684 square feet.

Finally, Martin Selig changed plans again for the former Federal Reserve Branch in downtown Seattle. Originally, the plan was to add a 660 foot tall apartment and office tower, but now the plan has shrunk to just five stories. The five story office addition would bring the total space available to 154,400 square feet and is set to be reviewed by the City on December 6th.

BUILDING SALES

November was a relatively slow month for building sales in Seattle as there was news of only one building changing hands.

New York based Tristar Capital and RFR Holdings purchased Amazon Phase VII for $244 million or $765 per square foot. Here is a look at a list of the top 10 office sales of the year in the region. Not surprisingly, three of the four largest sales in Seattle were of Amazon occupied buildings.

OFFICE LEASES

Surprise surprise, Amazon dominated office leasing news this month with the announcement that it will be leasing all of Midtown 21. The 365,000 square foot building at 1007 Stewart Street will be completed mid next year.

Big Fish games also inked a large lease in November taking the 187,000 square foot remodeled and expanded Maritime building. The move will take place in 2018 along the revitalized Seattle waterfront.

Also, Atlas Workbase which is a co-working provider just opened a new 20,000 square foot facility at 500 Mercer. Atlas seeks to cater towards all users rather than solely focusing on the tech scene.

Another technology company, RealSelf, has doubled their office footprint. The rapidly growing online community for people seeking cosmetic procedures leased at least 24,000 square feet in the 83 King building.

ECONOMY

In a surprising turn of events for many Americans, Donald Trump was elected the 45th President of the United States. Now that he is President elect, the controversial figure has received public support from many Seattle based executives, even those that previously publicly opposed him.

Jeff Bezos, Satya Nadella, Boeing, and Starbucks all offered support moving forward. Jeff Bezos said “ I for one give him my most open mind and wish him great success in his service to the country”.

Immediately following the election many Seattle biotech stock prices soared 10-16%. Investors were worried that if elected, Hillary Clinton would increase regulations on drug prices thus hurting the bottom line of many Biotech and Pharma companies.

One local economist of Windermere Real Estate believes that Trump will bring forward deregulation allowing banks more latitude to lend to homeowners, thus helping the local residential real estate market.

In Seattle’s local election, voters approved the $54 billion dollar Sound Transit Proposal. The new measure will bring 62 miles of light rail, plus bus and heavy rail service to the area which proponents hope will curb mounting traffic problems in the area.  In addition, voters passed an initiative to increase minimum wage to $13.50 by 2020.

Outside of election season, more news relevant to the Seattle economy was released in November.  Investors continue to pour billions into commercial real estate. Excluding homes, foreign investors have spent nearly $4 billion on local assets since 2015 ranking Seattle as the number 5 city in the country for foreign investments.

It is no surprise that people see Seattle as an attractive place for investment as the city continues to add 311 new jobs every week and is consistently ranked in the top ten US cities for Job Growth.  The Pacific Northwest has become highest in the nation for U.S. job growth according to the U.S. Bureau of Labor Statistics.

This month the UW Runstad Center released data that for the third quarter the statewide median for single family home prices rose to $305,000, 4.3 % higher than last year.

Seattle is now the hottest housing market in the nation. According to S&P Case Shiller, Seattle’s home price increase of 11% year to date earns the Emerald City the top spot.

All metrics seem to show positive signs for the local economy, even among those fearing that we are due for a correction. At the annual Urban Land Institute summit, experts predict a soft and slow correction for the Seattle market if any at all.

TUNNEL/VIADUCT

The giant tunnel-boring machine Bertha has finally reached the mile mark along its 9,270 foot journey. Construction started in 2007 and is slated for completion in 2023.

In addition this month it was revealed that the WSDOT is testing a new bridge as part of the viaduct replacement that is designed to bend back to its original shape after a magnitude 7.5 earthquake.

In negative news for the Waterfront Redevelopment, The Seattle Historic Waterfront Association, the alliance for Pioneer Square, and many others are challenging the redevelopment plan saying that it will cause gridlock and fail in its current form.  Although many are openly opposing the plan, they are confident that all issues will be resolved before construction begins.

OTHER NEWS

Finally, here is a look at Tableau Software’s new office space in the NorthEdge building referenced above.

Also, here are photos of the CoMoton HQ at the University of Washington, which is designed to be a hub for innovative companies, were released in November.

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Seattle Office Space News – October 2016

News

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

OFFICE DEVELOPMENTS

In October the University of Washington released ambitious plans to add nearly six million square feet of academic, office, and research space to its Seattle campus. The new plans are a part of the draft master plan released this month in anticipation of an upzone in the University District’s height limits, by the Seattle City Council. All of the expansion is planned for land that the University currently owns and is focused around the South and West areas of campus.

Also, a Chicago based coworking provider called Level Office unveiled its newest location at the historic Pioneer Building this month. Level Office purchased the building last December for $20.5 million and has remodeled the space to fit today’s tech driven demand. The company is advertising individual desks as well as 800-2,400 square foot private suites as available.

BUILDING SALES

Building sales activity remained relatively quiet in October with only a few properties trading hands. Los Angeles based Hudson Pacific Properties and Toronto based Canada Pension Plan Investment Board purchased the 11 story Hill 7 building at 1099 Stewart Street. The sale price was $179.8 million for the 285,680 square foot building, equating to $629 per square foot.  Touchstone was the seller of the property hosts marquee tenants such as Redfin & HBO.

In addition, the Broadacres building at 1601 2nd Ave in downtown Seattle was purchased by LBA Realty. Principal Real Estate sold the 123,108 square foot building for $25.4 million or $206.3 per square foot. The office portion of the building is 50% leased and Asian grocer H mart will be occupying much of the retail portion in the next year.

Chris Hansen purchased another building and parcel of land in Seattle’s SODO neighborhood this month for $25 million as he continues to gobble up property around the area. The six story building located at 1518 1st Ave South contains office space above Henry’s Tavern. All in all, Hansen has spent nearly $122.5 million on twelve acres in the area in the hopes of assembling enough parcels to build an arena and surrounding retail to attract the NBA and NHL.

Hansen revealed in October that his group is now offering to privately fund a proposed new NBA and NHL arena. A few months ago, the City Council did not pass a vote to allow a vacation of a portion of Occidental Avenue that Hansen would need to build the arena. Hansen’s new plan does not require any taxpayer funds to be allocated to the project and he has also agreed to put up nearly 20 million dollars for a Lander Street overpass to decrease congestion coming from the Port (one of the main opponents of the arena).

OFFICE LEASES

Once again, Amazon dominated office leasing news this month. The e-commerce giant announced that they will be leasing all of Centre 425 (354,000 square feet) in downtown Bellevue.  In addition, Amazon leased 81,000 square feet in South Lake Union at 428 Westlake Ave N, the former headquarters of Tommy Bahama.  This is relevant to the Seattle market because it is the first office expansion by Amazon outside of their Seattle campus in the Puget sound market. In recent years, Amazon has accounted for roughly 2/3 of positive absorption in Seattle and further expansion on the Eastside may have a negative effect on absorption in Seattle.

ECONOMY

Seattle’s red hot commercial and residential real estate markets showed no sign of slowing in October.  The Emerald City now has more than 58 construction cranes currently at work, more than any other city in the nation.

In relation, a new report by Zillow shows that Seattle has the third highest home value appreciation and the highest rent appreciation year over year among the 35 largest housing markets in the United States. Median home values rose 11 percent in Seattle and surpassed $400,000 for the first time in history.  This means that Seattle is the most expensive housing market outside of California, just edging out Boston for the top spot.  Finally, in that same report, Zillow predicts that Seattle will remain in the top spot for highest rent appreciation over the next twelve months.

Not surprisingly, with the rapid growth in Seattle the unemployment rate in the Seattle metro area fell to 3.9%, down from 4.1% in August.  In total, 92,600 jobs were added in the year long period.

While the Seattle area market seems hot, global venture investing has been way down. VC funding dipped for the 5th straight quarter in the number of companies receiving investment and a 32% quarter over quarter decline. Over $15 billion was invested in more than 1,600 companies this last quarter, the lowest figures since Q4 2010.

CB Insights Anand Sanwal had an appropriate response to criticism that the VC funding is not going well: “Before everyone starts saying the sky is falling, it’s worth noting that a bit of sobriety is a good thing… 2015 funding levels were irrationally high with a new unicorn being birthed every 3rd days as investors were keen to force-feed perceived startup winners with cash.”

This month the Washington Employment Security Department released concrete numbers on how Amazon is shaping the Northwest. Between May and August, Amazon.com posted 11,042 job openings online in King County, double the number from the same period last year. It is now estimated that the tech giant has nearly 25,000 local workers.

TUNNEL/VIADUCT

Wow- it has been several months with nothing but good news from the Tunnel and Viaduct project. Bertha is now halfway done with its journey and if all goes according to plan; it could break out near the space needle by May of next year.

OTHER NEWS

Finally, this month the PSBJ took a look at the Docusign office located at the Wells Fargo Center in downtown Seattle.

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Q3 2016 Seattle Office Market

Analyzing the Data

General Conclusion: Seattle’s office market continues to strengthen into the later part of the year with vacancy decreasing to 6.6% in Q3 2016 down from 7.3% in Q2. Year to date net absorption for the Downtown Seattle Office Market stands at 2,283,096 square feet.  Continued demand for Seattle office investment product compiled with decreasing vacancies continues to put upward pressure on rental rates across all submarkets and building classes.  Market fundamentals are expected to be in favor of landlords for the rest of 2016 and into 2017.

Economy:  The northwest has continued to see significant job growth in 2016. Washington’s preliminary seasonally adjusted unemployment decreased to 4.1% in August of 2016 according to The Washington State Employment Security Department, down from 4.7% in Q2.  The Bureau of Labor Statistics is reporting a slightly higher of 4.5% for the Seattle/Tacoma/Bellevue area.

Office Construction: The raging construction boom in Seattle continues with the following developments all currently under construction:

  • Amazon II, and Amazon Phases VI, VII & VIII totaling:~ 2,094,000 square feet (100% leased to Amazon)
  • Troy Block :~817,000 square feet (100% leased to Amazon)
  • Madison Centre:~750,00 square feet (Davis Wright Tremaine is anchor tenant)
  • The Mark:~528,000 square feet
  • Former Pemco HQ:~370,00 square feet
  • Midtown 21:~365,00 square feet
  • Tilt 49:~307,296 square feet
  • The Alexandria Center:~288,850 square feet
  • Hawk Tower:~208,840 square feet (Avalara is anchor tenant)
  • 15th & Market:~204,000 square feet
  • North edge:~202,620 square feet

Office Developments:  As noted, office development in Seattle continues to remain strong.  Below are a few significant updates on office development from Q3 2016

  • The Seattle design review board unanimously signed off on Google’smassive South Lake Union Expansion. The project will include several buildings up to 14 stories tall totaling 621,100 square feet. Construction is expected to begin in early 2017 and completion is slated for 2019.
  • Converseley, Expedia revealed that they will not initially be building an additional 600,000 square foot building on its new Seattle waterfront campus. It still remains to be seen if they will construct any new space or just remodel the existing footprint of the campus.
  • Martin Selig is also reportedly downsizing the scope of his development project on the former Federal Reserve building site. Filings show that Selig now plans to add eight stories to the existing structure, totaling 125,000 square feet of office space. Previous plans had shown as many as 44 floors added to the historic building at 1015 2nd Ave, which must be kept intact.

Office Sales:  In general, building sales in Q3 2016 stayed cool compared to 2015 with only a few properties changing hands.  The following building sales were completed in this quarter:

  • Vulcan sold the 317,000 square foot Amazon Phase VIII to Korean based Mirae Asset Global for $246.8 million. The high price of $770/sf continues to show strong demand for office product in Seattle and also reinforces the trend of foreign capital interest.
  • GLL Real Estate Partners and Vestas Investment Management (Munich and Seoul based) purchased the 793,679 square foot Safeco Plaza building from CommonWealth Partners for $387 million. The building is 98 % leased and the price equals $488 per square foot.
  • The Watermark Tower at 1109 1st Ave sold to Martin Smith Inc. The 71,150 square foot office and residential building sold for $20.25 million or $284.61 per square foot. The building is situated right in front of the soon-to-be demolished viaduct and has seen the value appreciate from its purchase in 2012 for $11.2 million.

Office Leases:  Office leasing in the third quarter of 2016 continued to slow from the second quarter, although several companies expanded:

  • Law firm Davis Wright Tremaine announced that they will be the anchor tenant for the new Madison Centre development at 5th & Madison in downtown Seattle. DWT will occupy eight floors or 164,000 square feet in the project that is expected to open in 2017
  • Dropbox leased another floor in the Columbia Tower at 701 5th Avenue as it continues to hire aggressively in the region. The San Francisco based storage provider has 65 employees in Seattle currently.
  • Darigold will be moving its headquarters from South Seattle to the Georgetown neighborhood where it has leased 37,000 square feet in the newly renovated Georgetown Squared at 5601 6th Ave S.
  • Nanostring Technologies expanded by 19,000 square feet in the Vue Research Center at 500 Fairview Ave N, bringing their total footprint to 76,800. In addition, a stealthy new Biotech, Silverback Therapeutics, will be taking 19,600 square feet in the same building.

Below is a table providing information for the major sub-markets of Seattle:

q3-2016-market-data

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Seattle Office Space News – September 2016

News

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

OFFICE DEVELOPMENTS

This month the City’s design review board unanimously signed off on Google’s massive South Lake Union Expansion. The project will include several buildings up to 14 stories tall totaling 621,100 square feet. Construction is expected to begin in early 2017 and completion is slated for 2019.  New images that were part of the design review board show how Google’s new campus will continue to transform the tech-centered South Lake Union neighborhood.

Also this month, timber giant Weyerhaeuser began moving in to their new headquarters in Pioneer Square located at 200 Occidental. The company’s previous home was a 430 acre campus in Federal Way.  This move exemplifies the strategy of many companies to urbanize in an attempt to attract and retain talent.

BUILDING SALES

There was just one building sale reported in September with the Watermark Tower at 1109 1st Ave selling to Martin Smith Inc. The 71,150 square foot office and residential building sold for $20.25 million or $284.61 per square foot. The building is situated right in front of the soon-to-be demolished viaduct and has seen the value appreciate from its purchase in 2012 for $11.2 million.

OFFICE LEASES

Once again the tech industry dominated office space news in September. Dropbox leased another floor in the Columbia Tower as it continues to hire aggressively in the region. The San Francisco based storage provider has 65 employees in Seattle currently.

In an opposite trend, Seattle based Porch has announced that they will be reducing their current footprint by 50%. Porch laid off about 92 workers in October 2015 and has now consolidated into 30,000 square feet at their building in SoDo at 2200 1st Ave S.

Finally, international engineering and design firm Stantec opened a Seattle location in September. The company leased 16,993 square feet on the sixth floor of the 400 Fairview building in South Lake Union. Stantec’s employees wanted to be closer the central core, which is what prompted the move from Lynwood to Seattle.

ECONOMY

All signs continue to show the tech industry leading growth in the Pacific Northwest. Seattle was named the second hottest tech office market in the U.S. as tech companies leased 2.5 million square feet in the Seattle-Bellevue area last year, trailing on Silicon Valley at 3.9 million square feet. Industry experts expect the trend of large Silicon Valley companies opening outposts to continue as the average rental rate in Seattle is 55% less than the Valley.

A supporting report by Zillow shows that more and more people are continuing to search for homes in Seattle that do not currently live here.  Although this report does not show the entire picture it does offer some evidence that the high home prices are not driving residents out… at least not yet.

Home values in August rose at an 11.3 percent annual rate, the second highest in the nation. Surprisingly, this rate is significantly faster than the Bay Area where rates saw a cooling to 6 percent.

In a direct relation to Seattle’s growth, a $53.8 billion transportation package that would more than double the region’s light rail system is on the November ballot. Local technology leaders are advocating for the measure saying that Seattle needs to step up or fall behind as Seattle’s traffic problems continue to mount.

The office and residential market are not the only real estate sectors seeing extreme growth. A new report shows that nearly 2,940 hotel rooms are scheduled to open in Downtown Seattle in 2017 and 2018. The newest of these projects is Skanska’s 229 room Charter hotel at Second and Stewart Street near the market.

In relation to Seattle’s growing pains, a committee convened by Mayor Ed Murray has proposed several steps that could help small businesses find affordable space in the City. The findings did not support commercial rent control which many business leaders had levied for.

TUNNEL/VIADUCT

Earlier this month it looked like there would be another tunnel delay, as Bertha’s operators lost their liability insurance for a few hours. The tunnel was originally planned to open on August 31st and the operator had not extended its policy to account for the delays. Luckily, the stoppage was momentary and everything seems to be back on track.

In addition, the tunnel boring machine took a quick maintenance stop earlier this month after a two week break to replace heavy cutting tools.  The projected opening for the project is early 2019.

OTHER NEWS

Brooks Sports headquarters building in the Fremont neighborhood was just named one of the greenest buildings in the world by being a part of the Living Building Pilot Program. The only other building in Seattle is the Bullitt Center. The buildings cut water and energy usage by 75% and reuse 50% of the rainwater that they capture on site.

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Seattle Office Space News – August 2016

News

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

OFFICE DEVELOPMENTS

Although the weather may be turning, there seems to be no slowdown in Seattle’s office space market. A new report from August predicts that Amazon will occupy twelve million square feet of space by the year 2022, which is 20% more than projected two years ago.

Also in August, the exterior of the new Madison Centre began to take shape. The entry will feature a 70 foot wide and 60 foot tall glass rotunda. The 746,000 square foot building is scheduled to open in the second quarter of 2017.

Starwood capital released new renderings of the Macy’s renovation in downtown Seattle. The building located at 300 Pine, is being updated to include a rooftop deck and will have more than 300,000 square feet of office space available space.

Martin Selig is reportedly downsizing the scope of his development project on the former Federal Reserve building site. Fillings show that Selig now plans to add eight stories to the existing structure, totaling 125,000 square feet of office space. Previous plans had shown as many as 44 floors added to the historic building at 1015 2nd Ave, which must be kept intact.

Unico unveiled recent updates to the “Speakeasy” type bar on the 35th floor of Smith Tower, which offers visitors a glimpse into the building’s historic past. In addition, a new Tenant amenity floor has been added on 22.

BUILDING SALES

There was no news of significant office building sales in August.

OFFICE LEASES

Darigold will be moving its headquarters from South Seattle to the Georgetown neighborhood where it has leased 37,000 square feet in the newly renovated Georgetown Squared. Darigold will join Anderson Construction, ClearResult, and OpenSquare which have all recently signed leases in the building.

ECONOMY

For the first time in several months, there seems to be a few signs of a slowdown in the local and global economy. In the second quarter, 18% of venture capital investments valued a company for less than the previous financing round. This so called “down round” represents nearly triple the amount as previous quarters, in a sign that the VC market is cooling.

In related news, Redfin released a report about residential real estate indicating that price bidding wars may be slowing down as housing inventory increased 7.6% in July. However, Seattle is still tied for Denver as having the lowest inventory in the nation and is still very much a seller’s market.

The average rental price in Seattle jumped 8.4 % in the last year, making the region the second highest for rent growth in the nation.

There were a few articles in August pointing to the fact that Seattle’s economy is incredibly healthy and one of the fastest growing in the nation. A new report from Indeed shows Seattle is the highest paying city in the nation for software engineers, data analysts, and quality analysts when factoring in the cost of living.

TUNNEL/VIADUCT

Thankfully, there was no news of another delay this month in the construction of the tunnel that will replace the Alaskan Way viaduct along Seattle’s waterfront. The WSDOT did release a video showing how each 36,000 pound piece of the tunnel is constructed and pieced together.

 

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Seattle Office Space News – July 2016

News

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

OFFICE DEVELOPMENTS

This month Expedia scaled back initial plans for expansion on their new Elliott Bay campus. The travel giant had initially planned to renovate 600,000 square feet of lab into office space as well as construct a new 600,000 square foot building. It now seems that Expedia will just renovate the labs and construct the new building when needed.

BUILDING SALES

The amount of foreign capital being poured into Seattle did not slowdown in July. Korean based Mirae Asset Global has acquired Amazon Phase VIII for $246.8 million from Vulcan Real Estate. The 317,000 square foot building was completed last summer and sold for nearly $770 per square foot.

Also this month, GLL Real Estate Partners and Vestas Investment Management (Munich and Seoul based) purchased the 793,679 square foot Safeco Plaza building from CommonWealth Partners for $387 million. The building is 98 % leased and sold for $488 per square foot.

OFFICE LEASES

The big news in office leasing this month was the announcement that law firm Davis Wright Tremaine will be the anchor tenant for the new Madison Centre development at 5th & Madison in the central business district. DWT will occupy eight floors or 164,000 square feet of the ~764,000sf  project that is expected to open in 2017.

The South Lake Union submarket of Seattle continues to be on fire as Nanostring Technologies expanded by 19,000 square feet at 500 Fairview Ave N, bringing their total footprint to 76,800. In addition stealthy Silverback Therapeutics will be taking 19,600 square feet in the same building.

ECONOMY

Little signs point to a slowdown in Seattle, even with global markets cooling off after a Brexit vote as well as an anticipated fed rate hike. Seattle’s regional population is growing at a historic pace, adding 86,320 residents year to date. Many economist wonder if this face paced growth will lead to Seattle becoming the next Bay Area, or if we will see a slowdown. One DJC reporter noted that as along as Amazon continues to grow, so will the Northwest. With that being said, many think that the housing market will begin to “cool” in 2018 when it is expected that the Fed will increase rates a few more points.

Adversely, a slowdown in VC investing during in the second quarter reduced investing to its lowest level since 2014. The slowdown in the VC market can be an early sign of investor skepticism of the future.

TUNNEL/VIADUCT

Tunnel boring machine Bertha took a planned maintenance stop this month to repair cutting tools. Workers had to endure high pressure environments to repair each cutter “tooth” that weighs over 75 pounds. A video of the repair can be found here.

In addition, here is a video showing how WSDOT is installing the double decker highway piece by piece once bertha has passed by. Bertha has now traveled about a third of its total distance and seems to be on pace – finally! This month WSDOT put the price tag of the delays thus far at $233 million…

OTHER NEWS

This month Trupanion opened the doors to its new 70,000 square foot headquarters in the Georgetown neighborhood, with plenty of room for its employees and pets.

Finally, Biomed realty has opened a “biotech startup space” in the 201 Elliott building, which aims to give emerging Biotech companies access to ready to go lab space.

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Q2 2016 Seattle Office Market

Analyzing the Data

General Conclusion: Seattle’s office market continued rapid growth into the middle of the year with vacancy decreasing to 7.3% in Q2 2016 down from 7.9% in Q1. Year to date positive absorption for the Downtown Seattle office market is 1,351,735 square feet.  Rental rates across all submarkets and building classes are on the rise and concessions continue to decrease for two reasons.  First, tenant demand is outpacing the supply coming to market.  Second, investment money from all over the globe is competing to purchase office product in Seattle.  Given these forces, market fundamentals are expected to be in favor of landlords for the remainder of 2016 and into 2017.

Economy:  The northwest has seen significant Job growth in 2016. Washington’s preliminary seasonally adjusted unemployment decreased to 4.7% in May of 2016 according to The Washington State Employment Security Department, down from 5.8% in Q1 .  The Bureau of Labor Statistics is reporting a slightly higher rate of 4.8% for the Seattle/Tacoma/Bellevue area.

Office Construction: Seattle builders continue to enjoy the construction boom with the following developments all currently under way:

  • Troy Block :~817,000 square feet (100% leased to Amazon)
  • Madison Centre:~750,00 square feet
  • 333 Dexter:~650,000 square feet
  • The Mark: ~528,000 square feet
  • Former Pemco HQ:~370,00 square feet
  • 200 Occidental :~370,00 square feet (100% leased to Weyerhauser)
  • Midtown 21:~365,00 square feet
  • Tilt 49:~307,296 square feet
  • Urban Union:~291,00 square feet (100% leased to Amazon)
  • The Alexandria Center:~288,850 square feet
  • Hill 7:~285,000 square feet (Redfin and HBO as anchor tenants)
  • Hawk Tower:~208,840 square feet (anchor tenant Avalara)
  • 15th & Market:~204,000 square feet
  • NorthEdge:~202,620 square feet (100% leased to Tableau)
  • 450 Alaskan Way: 166,772 square feet (anchor tenant Saltchuck)
  • 1101 Westlake:~ 150,000 square feet

Proposed Office Developments: Given the health of Seattle’s market, office developers are eager to break ground. The following are proposed office developments:

  • Developer Wright Runstad is looking for preleasing to kick off their 762,800 square foot Rainier Square redevelopment.
  • Skanska has 650,000 square feet of office space planned for the site at 1201 Second Avenue; construction is scheduled for Q4 of 2016.
  • Beacon Capital has plans to redevelop the historic Maritime building on the Waterfront. The scope of the project is yet to be determined but could include up to an additional eight stories.
  • Martin Selig also plans to redevelop a historic former Federal Reserve Building at 1015 2nd. Initial plans show an additional 12 floors of apartments.
  • Talon has a 200,000 square foot office project planned for the former Bucca di Beppo site at 820 Roy Ave North.
  • Urban Visions is proposing to build a 170,000 square foot office building at 1516 2nd Ave near Pike Place market.
  • Miami based Crescent Heights is planning a 101 story mixed use project at the west side of Fourth Avenue between Columbia and Cherry Streets that will include 151,650 square feet of office space.
  • Expedia has filed plans to expand its already massive waterfront headquarters on Elliott Ave. The travel company plans to build an additional 600,000 square foot building and has room for several more phases of development on the 40 acre campus in the future. Construction to turn the former Amgen laboratory space into office is slated for 2016.

Finally, Vulcan has several blocks in South Lake Union that can be developed. Google has signed a lease for over 600,000 square feet of space from Vulcan, a construction timeline is not yet clear.

Office Sales:  In general, building sales in Q2 2016 stayed cool compared to 2015 and Q1 of 2016, with only a couple of significant properties changing hands.  The following building sales were completed in Q2:

  • Schnitzer West and Investcorp purchased the 41 story office tower 901 Fifth Ave from Kennedy Wilson and RREEF North America. The group paid $233.3 million or $431.56 per square foot for the 540,600 square foot building. Schnitzer added the building to their central business district portfolio, which is within a block of their 36 story Madison Centre office development.
  • Mack Real Estate sold the 124,740 square foot 1411 4th Ave building for $29.75 million to Vancouver based Omni Development. Omni paid just over $238.49 per square foot and plans to undergo extensive renovations to the property.

Office Leases:  Office leasing in the second quarter of 2016 was a bit slower than previous quarters, although several tech companies made news of expansion including:

  • Redfin leased 112,990 square feet in the new Hill 7 development, which will give the company plenty of room to expand in Seattle.
  • Avalara confirmed it has leased 100,000 square feet in the new Hawk Tower development at 255 S King Street.
  • Proquest is moving its headquarters from Fremont into 29,716 square feet in Home Plate Center near Safeco Field.
  • Gravity Payments signed a lease for 22,000 square feet at the new development, The Commons @ Ballard.
  • 3D Printing startup Glowforge has leased 21,721 square feet at 2200 First in South Seattle.
  • WATG architectural group opened a new Seattle studio. The 5,700 square foot space in the Olympic Tower will focus on commercial, residential, and hospitality projects.

Below is a table providing information for the major sub-markets of Seattle:

q2-2016-market-data

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