Seattle Office Space News – March 2015

News

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

PROPOSED DEVELOPMENTS

The market for new office construction continues to blossom in Seattle.  Schnitzer West announced that they are exploring the capital markets for their 750,000 square foot office development Madison Centre. The project located at Fifth and Madison in the central business district does not currently have any pre-leases signed, but the developer has started construction on the parking garage.

Work has finally begun on Weyerhaeuser’s new office building in Pioneer Square. The 214,000 square foot project located at 200 Occidental is set to open in the third quarter of 2016.

BUILDING SALES

The biggest office sale of the month goes to CBRE Global who bought the Metropolitan Park East & West buildings for $272.8 million.  Brookfield sold the 729,750 square foot buildings that are 95% leased for $374 per square foot, which is 30% more than they paid for it 3 years ago.

The joint venture between Wright Runstad & Shorenstein Properties sold the Seattle Trade & Technology Center at 2601 Elliott Ave for $170 Million or $507 per square foot.  The 335,500 square foot building is home to the headquarters of online retailer Zulily.

Providing further validation of Seattle’s frothy commercial real estate market, it has been confirmed that Columbia Center is officially on the market. Beacon Capital has been upgrading Seattle’s tallest building (76 stories) and filling it with tenants since its purchase in 2007 for $621 million.

Vulcan Real Estate has been taking advantage of high office prices by selling off some of its holdings in South Lake Union.  In March, Paul Allen’s development company announced plans to sell the Rosen Building at 960 Republican, which totals 60,375 square feet and is home to the UW Medical Center. Additionally, Vulcan listed PATH’s headquarters building at 2201 Westlake for sale. The 317,200 square foot building is completely full and is home to other tenants such as Amazon and West Elm home furnishings.

OFFICE LEASES

March was a big month in office leasing news in Seattle.  Once again Amazon crushed all other headlines with the announcement of their 817,000 square feet lease of Touchstone’s Troy Block development. The two buildings are just east of Amazon’s headquarters campus and are scheduled to open in 2016 and 2017.  The presence of Amazon and other tech companies have had a tremendous effect on Seattle’s office market and the transformation of the South Lake Union neighborhood.

Hill7, another Touchstone development at the intersection of Boren and Stewart Street, announced that HBO has inked a deal to lease four of the eleven floors there. The 285,000 square foot office building is currently under construction and is set to open in May of this year.

Fast growing startup Porch signed a new lease for 50,000 square feet at Zulily’s former headquarters building at 2200 First Ave South. The company said it has rights to expand into the entire 106,000 square foot envelope which can accommodate up to six hundred employees.

KING 5 finally closed their deal to move to the first three floors of Home Plate Center. The office complex developed with EB5 money by American Life is kitty corner to the main entrance for Safeco field.

Finally, Uber is the latest to join the list of San-Francisco based companies who are expanding in Seattle. The ride sharing company announced on the UW computer science website that they will open a new engineering office and hire fifty employees.

TUNNEL/VIADUCT

March was one of busiest months in recent memory for news about the tunnel project to replace the Alaskan Way viaduct along Seattle’s waterfront. Finally, the rescue of Bertha!  The tunnel boring machine is at last in position to be lifted and repaired.  Crews will continue to replace broken parts and reinforce the machine with over 1,000 tons of steel. In related news the general contractor on the project, Seattle Tunnel Partners, asked the State for an additional $12 million for expenses related to delays for the slogging project.  Although Bertha has been delayed for over a year, officials close to the project hope that the machine will begin to tunnel again by August.

ECONOMY

The Seattle area residential real estate market is on fire.  Supply of inventory for sale is nearly at a 10 year low and median sales prices continue to increase.  Bolstered by strong job growth, 2015 could be the biggest year for residential sales in Seattle’s residential market since 2008, which is bad news for buyers.

Another interesting indicator of growth in the area is the number of new drivers licenses issued in the state.  In 2014 64,376 new licenses were issued in Washington, up by more than 8,000 from 2013.

OTHER NEWS

The renovation of 2200 Western brings a historic change to the 66,000 square foot building in the Belltown neighborhood of Seattle. Occupants will include contractor Lease Crutcher Lewis, Weinstein Architects, and fast growing tech company TUNE.

Finally, here is a look inside the offices of Howard S. Wright Construction and healthcare hub Cambia Grove.

 

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