Seattle Office Space News – December 2014

News

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of December 2014.

PROPOSED DEVELOPMENTS

The Seattle real estate market continued its boom into the end of the year with news of several new office developments.  Touchstone plans to start construction in late 2015 on a mixed office and residential project in the Denny Triangle area of downtown Seattle. Tilt 49 will be comprised of a 40 story apartment tower and an 11 story office building. The project will be located between Boren Avenue and Stewart Street, where a Goodyear store and surface parking lot currently reside.

Los Angeles based Hudson Pacific continues to invest heavily in the region. In December, Hudson applied to the City for a master use permit in order to build an eight story office project located at 76 S. King Street along the waterfront. Hudson is bullish on this property and has not set any pre-leasing requirements before construction begins. A company spokesman stated construction is scheduled to begin in 2017.

To the north, Martin Selig continues to invest in Seattle’s Ballard neighborhood. A company related to Martin Selig paid just over $16.25 million for half a block at 1448 N.W. market St where they plan to construct a five story 204,000- square-foot office building.

BUILDING SALES

The biggest office sale in November was the purchase of Brooks’ new HQ in Fremont by Unico and Laird Norton from Skanska USA. The Unico/Laird Norton joint venture paid $70.1 million for Stone34 located at 3400 Stone way or $539 per square foot.

Unico also purchased Pemco’s headquarters building in December.  The building located between Harrison and Thomas streets and Eastlake Avenue East and Yale Avenue North, sold for $51.75 million or $277 per square foot. The property consists of a five story 186,260 square foot building, above ground parking garage, and a surface parking lot.

The Seattle Design Center sold for half of its original purchase price seven years ago.  Hines was the seller of the 437,900 square foot property that is dived into two-buildings located at 5701 Sixth Ave S.  Greenbridge Investment partners out of Beverly Hills paid $24.9 million for the property, or $56.86 per square foot.

UK based St. Brides’s Managers paid $10.1 million for a four story office in Belltown located at corner of 4th and Blanchard. The seller, Nicola Crosby of Vancouver B.C. was able to obtain 53% more than they originally paid for the building.

Finally, the building that houses Seattle’s oldest bar the J&M Café sold for $3.24 million.  The limited liability company J&M Capital Group sold the building located at 201 First Ave S to Seneca Ventures.

OFFICE LEASES

Not surprisingly, Amazon made more headlines in late 2014 as the internet giant continues to occupy space in South Lake Union. This article summarizes the massive amount of office leasing Amazon closed on in 2014 including: two 38 story buildings currently owned and under construction by Amazon, Vulcan’s Phases VII and VII, 1915 Terry Ave, 2201 Sixth Ave, 635 Elliott and Fifth & Bell. The online retail group plans to have more than 10 million square feet of office space in Seattle within the next five years, which is enough space for 71,000 employees.

Disney once again proved that in Seattle, Tech companies have a home in downtown skyscrapers. The multimedia company not only renewed its lease at the 40 story Fourth & Madison tower but, they expanded their footprint. Disney now occupies a total of 170,000 square feet on seven floors.

Impinj announced that it will be leaving Fremont and taking 52,000 square feet at Skanska’s new 400 Fairview project in South Lake Union.

Fast growing Tableau continues to gobble up space in Fremont, signing a lease for 38,000 square feet at 701 N 34th. The data visualization company has increased its headcount by more than 56% in the last year.

Seattle’s Biotech industry also made headlines late this year with heavily funded Juno Therapeutics going public and Nanostring expanding its presence.  Nanostring extended their current lease at 500 Fairview until 2026 and also added an additional 21,541 square feet next door at the new 530 Fairview Ave N.  In addition, the company also expanded its footprint at 617 Eastlake by just over 14,000 square feet.

TUNNEL/VIADUCT

In more bad news for Seattle’s tunnel project, city officials estimate the project will be delayed another 11 months and is not expected to open until August 2017. This most recent delay comes after the Viaduct was reported to have sunk more than one inch. City officials commented that they would consider shutting down the viaduct if the sinking reached two inches. The movement of the viaduct was linked to ground water being removed in an attempt to repair the broken Bertha tunnel boring machine.  City officials stopped digging and pumping water in order to investigate the effects of the sinking on several buildings in and around Pioneer square.  After confirming that the damage to surrounding buildings was superficial and that the ground had stopped sinking, the City gave the green light for digging operations to resume.  Secretary of transportation Lynn Peterson told the City Council that the project is now 70 percent complete.

ECONOMY

A new report indicates that Seattle’s construction boom is not anywhere near its peak. Dodge Data & Analytics reported that there were more than $1.1 billion contracts awarded in October for future work in the Puget Sound Metro region.  This is more than five times the amount signed in October of 2013.

The sale price of Seattle area homes continued to rise in 2014 increasing 11%  year to date. With this increase, also comes an 8.6 % jump in the average rent paid in Seattle, which is not expected to slow down any time soon.

OTHER NEWS

Seattle based Urban Renaissance Group has acquired Touchstone group which now leaves Urban Renaissance Group involved in almost one billion dollars worth of  real estate projects in the Seattle area.

Finally, there were several articles in November providing a look into the office space of Seattle based companies  including: Publicis, Chef, and Graphlab.

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