Seattle Office Space News – September 2015

News

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

OFFICE DEVELOPMENTS

September brought the first news of a mammoth proposed development at 701 4th Avenue by Miami developer Crescent Heights Inspirational Living.  The proposed tower at 701 Fourth Ave will be 1,111 feet and 102 Stories, making it by far Seattle’s tallest structure. The building will potentially have 1,200 residential units, 151,650 square feet of office space, 150 hotel rooms and 15,500 square feet of retail.

Urban Union, the 291,000 square foot office tower being developed by Schnitzer at 501 Fairview, is scheduled to open in early 2016.  A spokesman stated that there are no signed leases but several companies are interested in the project (and it has been rumored that Amazon is taking down the entire thing).

California based Alexandria Real Estate Equities has proposed a ten story lab and office building at 1150 Eastlake Ave E. There is currently a small light industrial building and two parking lots on the site.  Alexandria is hoping that the 280,000 square foot building will be leased quickly as the biotech market continues to grow in Seattle.

A technical panel from The Urban Land Institute concluded that the highest and best use above the transit tunnel in the University District would be a “nontraditional office tower.”  The development of an office tower would bring much needed space to the area and could help create an “Innovation district” where technology companies could expand with valuable proximity to the University of Washington.

Unico Properties purchased the former Pemco headquarters at 325 Eastlake Ave E and plans to reposition the 160,000 square foot office building from Class B to Class A creative space.  Unico has renamed the site Yale and Thomas and will be putting significant capital in to the project in the hopes of attracting the regions next technology headquarters requirement.

BUILDING SALES

As evidence of the frothy commercial real estate investment market in Seattle, an office building under construction at 1101 Westlake sold before it was finished and without any pre-lease. Invesco paid $67.4 million or $449 per square foot for the 150,000 square foot office building, which is scheduled to be completed in December.

Vulcan Real Estate sold their very first South Lake Union project, the Rosen building located at 960 Republican Street, to Urban Renaissance Group in September.  URG paid $41 million for the 60,375 square foot building equating to $769 per square foot. The lone tenant of the building is the University of Washington School of Medicine, who has a long term lease.

OFFICE LEASES

Antioch University sold its current campus at Sixth and Battery and announced plans for a move. The non-profit university signed a lease three blocks to the East for 38,000 square feet at Martin Selig’s’ 2403 Third Ave project.

September also brought news of another Bay area tech company opening a Seattle office. Lyft revealed plans to open a development office and hire twenty full time employees by the end of the year.

ECONOMY

In big news for the Seattle economy, Chinese President Xi Jinping spent several days in the region in September. Xi met with several key northwest political figures as well as the regions biggest tech leaders from companies such as: Microsoft, Amazon, Alibaba, Boeing, and Starbucks.

This article measures the startling impact that the growth of Amazon.com has had on the Seattle area.  At a Seattle Metropolitan Chamber of Commerce meeting an Amazon representative indicated that Amazon’s recent growth has spurred the creation of 28,000 additional non-Amazon jobs, contributed over $400 million in tax revenue, and $5 billion in overall economic impact.

Further proof of the Seattle area growth is seen by the number of new residents settling here. The Seattle-Tacoma-Bellevue area added 61,373 residents last year making it the nation’s 11th fastest growing urban area.

The construction boom in Seattle is definitely tied to all of the employment and population growth.  Interestingly, the city of Seattle reported that 25% of sales tax in 2015 was attributed to construction.

TUNNEL/VIADUCT

The giant tunnel boring machine Bertha has made a significant step towards resuming operations. Crews have put in place two one-hundred ton plates that make up the machines outer shield. These were the last two parts to be replaced of Bertha’s extensive repair.  The machine has been stalled since December 2013 after overheating 1,000 feet along its 9,270 foot journey.  Engineers will begin testing the machines drive shafts and slowly test the machines ability to resume digging. Once bertha receives the green light to begin drilling, it will begin to make the trip under the Viaduct. The latest schedule for the project has the tunnel opening in spring of 2018.

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