Seattle Office Space News – January 2015

News

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of January 2015.

PROPOSED DEVELOPMENTS

Aggressive office development plans should continue in 2015 in Seattle. To start things off right, Amazon led the charge revealing plans for the development of a fourth block in the Denny Triangle area. The plans show two buildings, one 23 stories and the other 8 stories for a combined 835,200 feet of office space and 35,000 square feet of retail. The lot is bounded by Seventh and Eighth Avenue and Blanchard and Bell streets and would be built where a Budget car rental lot and Cornish college currently reside.

Trammell Crow’s 365,000 square foot office development that is currently under construction at 1007 Stewart Street will be called Midtow21, which is a reference to the 21 floors of the project.

Near many of his other developments, Martin Selig announced plans to begin building a six-story office building at 220 W. Harrison Street.  The building will be 183,779 square feet and construction will begin following permitting with or without a tenant in place.

City records indicate that First Western Development is planning a five story 105,432 square feet building across from fast growing Tableau’s headquarters in Fremont. The building will be located at 774 N 34th St and will be designed by Weber Thompson.

Near Amazon’s South Lake Union campus, the old Antique liquidators building located at 503 Westlake will be getting a facelift.  Bellevue based S.E. Grainger Group plans to add three floors to the 96 year old building and update the existing floors.

BUILDING SALES

Kilroy Realty Corp. is under contract to purchase the KING 5 property located at 333 Dexter Ave North in Seattle’s booming South Lake Union neighborhood.  Kilroy will likely tear the existing building down to develop a much larger project.  KING 5 is planning to move to the new Home Plate Center is SODO. The price for the transaction was not immediately available.

Seattle insurance company Pemco announced that they will be purchasing the former Casey Family Programs building located at 1300 Dexter Ave N from Vancouver based Holland Partner Group for an undisclosed price.  Pemco plans to move their 350 employees to the building in late 2015 after an extensive renovation.

After several months of speculation, Unico closed on the purchase of the iconic Smith Tower at 506 2nd Avenue.   Public records indicate Unico paid $73.7 million for the 264,350 square foot building located in Pioneer Square. The price per square foot of the sale equates to $279, which is over twice what it sold for in 2012.

Finally, a small retail building located next to Amazon’s headquarters sold for 172% more than it did eight years ago.  The 6,480 square feet of land was sold by Blue Water LLC and purchased by another unnamed LLC. This sale is directly across from Vulcans 12 story office development.

OFFICE LEASES

The largest office lease reported in January was the renewal of HomeStreet Bank at Two Union Square in the central business district. The anchor tenant of the building renewed for 142,000 square feet of space at 601 Union Street for an additional ten years.

Denver-based Galvanize leased 71,000 square feet at 111 S Jackson in Pioneer Square in January.  Galvanize is a hybrid of a tech co-working space and programming school with access to investors and mentorship.

After speculation of a big move, it was reported that Facebook has added space at their existing location in the Metropolitan Park Building.  The Menlo Park based company now has room to double their headcount from 400 to 800 employees.

TUNNEL/VIADUCT

There was a lot of news in January about the tunnel project to replace the viaduct along Seattle’s waterfront.  After reports in December that there would be more delays and complications with the tunnel boring machine known as Bertha, an expert review panel was assembled by Governor Gregoire to investigate the problems.  Different viewpoints are polarizing with one side pushing to finish the project and the other side wanting the project to be killed immediately.

ECONOMY:

January was full of news of economic indicators for the Seattle area.  According to Forbes, Seattle is the nation’s fifth fastest growing city when measuring population and economic growth.

In 2014 Venture Capital firms invested a total of $1.2 billion into Seattle area companies, up 36% from the previous year. 44% of those deals were related to software companies and 16.3% related to biotechnology. In more tech news, a recent poll by WalletHub concluded that Seattle was ranked sixth best metro area for STEM jobs (science, tech, engineering, or math). However, Seattle dropped down to 40th when the annual wages were adjusted for costs of living. Another study by Dice.com noted that Seattle is #2 in the U.S. for tech salaries.

As always, the residential real estate market provides indication of the health of the Seattle area economy.  Last month the number of pending home sales in Seattle was at its highest level in nine years and nearly two thousand of these homes were priced at one million or greater.  In Seattle, there was also 40 percent less foreclosures in 2014 than in 2013, with the expectation that this trend will continue in 2015.   Towards the end of January it was reported by Redfin that the supply of homes for sale is dwindling with 19% fewer listings than the previous month.

The organization Visit Seattle estimated that the influx of fans going to the Seahawks  playoff games will create $6 million in additional revenue for local restaurants, hotels and more. Despite the Superbowl loss, we should be proud and thankful of the Hawks organization for a great run and their positive impact on the city!

OTHER NEWS

A recent office report showed that 45% of all office leasing in Seattle was done by Tech companies.  Seattle ended the year with the 5th lowest vacant rate in the country at 10.7 percent.

The Puget Sound business journal also took a look at the offices of Avvo, which feature staged employees mugshots lining the walls.

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