Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of August 2014.
In some of the more exciting leasing news in months, Weyerhaeuser announced that they will relocate their headquarters from Federal Way into ~200,000 square feet at 200 Occidental Ave S in Seattle’s Pioneer Square neighborhood. While Pioneer Square has been a hub for startups, creative companies and three Seattle sports franchises, the influx of Weyerhaeuser’s 800 employees will be a major boost for the area which has otherwise been known as a downtrodden neighborhood with a lot of transient activity. 200 Occidental will have 15,000 square feet of retail and will be developed by Urban Visions.
The investment market was somewhat quiet in August with only the 44,100 square foot historic building at 1415 Western trading hands. Goodman Real Estate sold the office building near Seattle’s waterfront to Stream Real Estate for $12.4 Million or roughly $281 per square foot.
News about commercial development in Seattle is certainly no longer limited to hotels and apartment buildings. August brought lots of stories about office developers with sites that are in advanced planning stages and others who are threatening to start construction without a tenant.
BioMed Realty started construction on a 123,000 square foot life science building at 500 Fairview Ave N in Seattle’s South Lake Union Neighborhood. When combined with BioMed’s 530 Fairview building the project will have a total of 223,000 square feet and will be called the BioMed Realty Research Center.
Another speculative office building in Seattle’s South Lake Union neighborhood broke ground in August. Holland Partner Group and North America Sekisui House started on 1101 Westlake, which will have 150,000 square feet of office with high ceilings and 29,000 square foot floor plates. Holland has built several apartment buildings in the neighborhood and this project represents their first effort into office space in the region.
Of course Vulcan, Paul Allen’s real estate company with no shortage of sites in Seattle’s South Lake Union neighborhood, revealed some new plans for a few apartment buildings and a 100,000-150,000 square foot office building across from Lake Union Park.
Washington Holding has indicated that they will start construction in October of The Atrium, which is a 212,000 square foot office and lab project at 1818 Fairview in South Lake Union.
Touchstone Corp has a new potential project between Capitol Hill and South Lake Union called Tilt 49, which will include 307,000 square feet of office space and 368 residential units. This site is across the street from Hill7 where Touchstone is already underway on an 11 story office tower.
Touchstone also started construction without a tenant this month on NorthEdge in Seattle’s Fremont neighborhood. Given the demand for space in the area due to tech companies like Google and Tableau Software, Touchstone is confident that if they build the 214,000 square foot building – tenants will come.
The developers of Madison Centre, which is a proposed 37 story 754,000 square foot office building at 5th & Madison in Seattle’s central business district, are supposedly planning start construction without a tenant soon. Schnitzer West says the building will take 27 months to build and could open in late 2016.
Finally, the Seattle Housing Authority and Kidder Mathews are hoping to land a large new tenant for a 4.41 acre development site that could accommodate up to 900,000 square feet of office space. The site known as Yesler Terrace is in the First Hill submarket next to Harborview Medical Center.
Progress is being made in the repair of Bertha, the stalled boring machine creating the tunnel to replace the Alaskan Way viaduct. Seattle Tunnel Partners say that the pit being dug to access and repair the cutter-head is almost complete and they are hoping that the machine will resume work in March of 2015.
It is no surprise with Amazon, Microsoft and a slew of other established and emerging tech companies that Washington was named one of the fastest growing states for tech jobs in August. This article indicates that the state created as many jobs in Q1 & Q2 of 2014 as it did in all of 2013 and the only problem is a lack of supply of tech workers. Tech jobs have accounted for nearly 85% of all new jobs in the Puget Sound in the last couple of years resulting in Seattle’s office market being the 7th strongest in the country
Tech experts in the area agree that we aren’t in a tech bubble similar to the year 2000 because despite an alarming spike in valuations, the business fundamentals are good.
This story provides interesting insight into Suzie Burk, who is one of the largest commercial property owners in Seattle’s Fremont neighborhood. Suzie and her son Michael Osterfeld have been converting the property along the North bank of Lake Union into campuses for tech companies like Adobe, Google and Tableau Software over the past couple of decades. J.R. Burke originally bought the site in 1929 as a lumber company.