Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of August 2015.
Once again the month of August brought a flurry of development news. Eager to cash in on the development of Seattle’s waterfront, Beacon capital is planning a major renovation to the Maritime building located at 911 Western Ave. Beacon has notified existing tenants that they will eventually be required to vacate in an effort to reposition the building from class C creative office to class A creative office.
Expedia has proposed a master plan that over fifteen years would allow the company to more than double the amount of office space on its new property near Elliott Bay. The campus currently contains 750,000 square feet and Expedia has already revealed plans to build an additional 200,000 square feet.
Seattle developer Martin Selig showed further plans for the former Federal Reserve building. Selig is required to leave the structure of the building in place, and thus he has developed a plan to add major structural reinforcement that will allow him to add 533,000 square feet above the existing structure.
The University of Washington has indicated that it is considering an office tower up to 240 feet above the light rail station. If completed, the building would be one of two new office space developments in the area within the last few years.
Greg Smith has renamed his 1.1 million square foot Stadium East project to simply “S”. S represents not only the curvature of the buildings, but also Seattle, Sounders, and Seahawks.
Miami developer Crescent Heights has submitted early plans for a large mixed use development at the corner of Fourth and Columbia where a parking garage currently resides. The plans show 840 residential units, 160,000 square feet of office space, and 30,000 square feet of retail.
The sale of Columbia Center closed in August. The purchase is part of a larger trend of international money landing in the hot Seattle investment market. Gaw capital paid $711 million for the 1.5 million square foot building, equating to $474/sf. Gaw has several improvements planned that it hopes will attract new high-tech tenants.
Also, the Dexter Horton Building at 821 Second Ave hit the market in August. The proposed sale is just two years after the purchase by Portland based Gerding Edlen.
In no surprise, the tech industry dominated office leasing news once again in August. It seems that Amazon is not quite done leasing space in Seattle. A source commented that Amazon will be taking the entire 285,000 square foot Urban Union building at 501 Fairview Ave near its campus in South Lake Union.
It has also been reported that Docusign has signed a letter of intent to lease six floors at the Wells Fargo Center (999 Third Ave). The company would be moving out of the Russell Investments Center where another fast growing company, Zillow, is headquartered.
Tax automation software company Avalara will be leaving its longtime home in Bainbridge Island and moving in to the Second and Spring building in Seattle. The company already occupies 36,000 square feet in the building and will double their footprint.
Trupanion will be relocating their headquarters from Ballard to SODO. The pet insurance company leased over 100,000 square feet at 6100 4th Ave South, which is owned by Larry Benaroya.
The Seattle economy has continued to be noticed as one of the hottest in the country, ranking #5 in a WalletHub survey for best cities to live in. The survey used metrics such as livability, amenities, activities, quality of health and job growth.
Other indicators, such as unemployment, continue to support this notion. The Seattle-Bellevue-Everett jobless rate dipped to 3.7% in July according to the state Employment Security Department.
The Seattle area has seen an increase in construction costs, which have gone up 5% year to date and are expected to increase another 6% in the next six months.
Office rents have peaked to a new level not seen since early 2008.
Finally, although the median home prices fell in July, the housing market showed little sign of slowing down. This was the best July on record for the Seattle area according John L. Scott chairman Lennox Scott. Scott commented that median prices traditionally decline at the end of the summer and that the supply of homes available for purchase is still at record lows.
The delays continue for the repair of Bertha, as the replacement of the cutter head is two weeks late. The project is just over two years behind schedule. In related news, a group of eight insurance companies have sued to avoid paying for the $143 million it has cost to repair Bertha. The suit claims that the design of the machine was at fault and the insurance companies should not foot the bill.
In the first significant hiccup for the seawall project, it is now estimated that the project will be 33% more expensive and be at least one year delayed. Officials cited unforeseen issues related to the process of protecting against erosion in the soil for the delay and increase in cost. In contrast to the Bertha project, this is the first major derailment during the project. The Seawall replacement is now scheduled for completion in 2017.