Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of October 2014.
Commercial real estate development in Seattle and the Puget Sound area has been expanding for several quarters. This article provides an interesting profile of 16 huge construction projects in the area that include office, residential, hotel & life science projects.
Martin Selig made lots of news in October. First he dusted off plans for his proposed 75,000 square foot office building at Third and Battery that he tabled during the recession. New proposed projects for Selig include a 31 story tower at Third and Lenora in Belltown that will feature 291,000 square feet of office space and 158 residential units. Also, Selig is planning a 5 story project in Ballard at 15th Avenue NW and NW Market that will include 200,000 square feet of office.
Schnitzer’s Urban Union project in South Lake Union broke ground in October despite having no anchor tenant. The 12 story 285,000 square foot office project at 501 Fairview Ave N in South Lake Union will be delivered in the first quarter of 2016.
Seattle developer Touchstone and their partner AIG got a construction loan to kick off NorthEdge, the 208,000 square foot office project at 1601 N 34th Street in Fremont. The Bank of the Ozarks provided the three year loan and NorthEdge is scheduled to open in March of 2016. NorthEdge is also yet to find an anchor tenant.
Wright Runstad received some more press in October about the Spring District in Bellevue and the 1.2 million square foot tour at Fourth Avenue and Union Street in Seattle. The 54 story Seattle project will have 750,000 square feet of office space, 220 apartments and 30,000 square feet of retail space.
Also, Clise Properties and Graphite Design Group are hoping build an 11 story data center building at 2229 6th Ave, right in the midst of the new Amazon campus development.
Early October brought interesting news to the Seattle office leasing market as it was revealed that Facebook is shopping for at least 100,000 square feet of office space and is considering a conversion of the historic Macy’s building at Fourth & Pine in downtown Seattle.
Another tech company setting up shop in Seattle is Alibaba, the Chinese e-commerce company that recently went IPO on the NYSE, who opened an 8,000 square foot Seattle office at the Decatur building on 6th Avenue. This is interesting given the proximity to Seattle ecommerce giant Amazon.com.
Cambia Health Solutions leased 9,000 square feet at 9th & Olive in Seattle and plans to open The Cambia Grove to connect startups and entrepreneurs with leaders in healthcare, business and government.
Further, local Seattle publication the Stranger is looking to relocate into about 10,000 square feet by March 2015. Despite the fact that they have operated on Capitol Hill for 22 years, they are considering other areas throughout the city.
Brookfield Office Properties put the twin towers known as Metropolitan Park East & West on the market for sale in October. The complex is 95% occupied and could sell for up to $283 Million.
Following almost a full building lease by Amazon, Shorenstein Properties put Blanchard Plaza on the market for sale. The 237,200 square foot building located at 2201 Sixth Ave could fetch up to $125 Million or around $527 per square foot.
Finally, Trinity Real Estate paid close to $36 Million to LBA Realty for 500 Yale Ave North in South Lake Union. The price for the 71,400 square foot office building equates to $504 per square foot.
Seattle Tunnel Partners began digging the pit that will be used to fix Bertha, the stalled tunneling machine needed to bore the tunnel that will replace the Alaskan Way Viaduct. This news of progress was quickly squashed as it was then reported that the digging was stopped due to a deposit of shells that was found near the repair pit. The shells could indicate the presence of cultural materials from indigenous tribes or early settlers, so the department of transportation needs to coordinate with the Federal Highway Administration, tribal governments, and the Washington State Department of Archeology and Historic Preservation to determine next steps.
Job growth is always a leading economic indicator. This article based on a study by the W.P. Carey School of Business at ASU , reports that Seattle added 2.6% more jobs since the beginning of the year and is the 8th fastest growing city in the country. The study also indicates that Washington State is number 9 in the country for job growth.
The Seattle area residential market remains robust as supply in King County is low although it seems that buyers are becoming more discriminating according to brokerage sources. This trend is supported by Zillow who indicated in October that residential appreciation slowed to 6.9% in Q3 of 2014 when compared to Q3 2013 when homes were appreciating at 12%. However, the regional housing market should continue to be healthy as investment from China heats up.
This article provides an interesting fact that of the 10 largest office buildings in the region, none of them were built in the last 8 years. It is anticipated that there will be a few buildings built in this cycle that will crack the top 25.
The Pike Place Market Foundation is raising money for MarketFront, the $66 Million complex bridging the gap between the market and the waterfront that will be built on the surface parking lot on Western Ave adjacent to the Joe Desimone Bridge. MarketFront is expected to open in 2016.