Seattle Office Space News – March 2016

News

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of March 2016.

OFFICE DEVELOPMENTS

Office developers remain confident in Seattle.  At 1201 2nd Avenue in the central business district, Skanska is in for design review on their planned 671,000 square foot 2+U office tower.  Skanska has not announced any leasing in the project.

Expedia plans to expand its already massive waterfront headquarters on Elliott Ave. Expedia submitted plans to build an additional 600,000 square foot building and has room for several more phases of development on the 40 acre campus in the future. Construction to turn the former Amgen laboratory space into office is slated for 2016.

The Civic Square development that has long been delayed finally has a new developer.   Triad development which has been working on the deal since 2007 has asked the City to transfer its interest to Touchstone. Touchstone has until May 11 to reach terms with the City before the deal that has been plagued with political scandals finally dies.

BUILDING SALES

Last year King County’s largest  25 real estate sales brought in more than $4.8 billion. The sale of the Columbia Tower to Hong Kong based Gaw Capital tops the list.  In total, foreign investors acquired $2.8 billion worth of commercial real estate. A trend to make note of is that nearly $875 million was spent on Industrial Properties, likely due to the strong investor competition for high prized office buildings.

OFFICE LEASES

The biggest headline in recent Seattle office leasing history came this month. Vulcan announced it will be developing a 600,000 square foot campus for Google in South Lake Union between Mercer & Valley Streets and Terry and Fairview Avenues North. Google will relocate from their current Seattle offices in the Fremont submarket.

Amazon also had an announcement in March revealing that the company has leased the 286,000 square foot Urban Union building from Schnitzer.  Urban Union is near Amazon’s headquarters in South Lake Union at 501 Fairview Ave N. Some estimates show Amazon has committed to 8.8 million square feet In Seattle not including the 1.1 million square foot headquarters they plan to construct at Westlake Avenue.

Local coding school Code Fellows announced they will be moving from crowded South Lake Union to 20,000 square feet at Third and Broad at the edge of Belltown.  High prices in South Lake union led Code fellows to the new location, which is owned by Martin Selig Real Estate.

ECONOMY

The Seattle economy seemingly continues to boom with most indicators showing little sign of a slowdown.  The amount of construction cranes in Seattle is now up to sixty, which is 43% higher than this time last year. The same report indicates that 9,000 residential units have been built in the past few years here. Even though 9,000 residential units have been built in Seattle over the past few years, the residential market continues to be hotter than ever. The number of homes available in King County decreased 30% year to date and home prices spiked 19.8% last month. Much of this growth has been spurred by technology giants such as Amazon and Google. Tech workers now make up more than 8.2% of Washington’s Workforce and they make a lot of money. The average salary was $130,000 for tech workers the second highest in the nation. Seattle now has the 5th highest concentration of rich millennials according to Zillow.

The amount of high paying jobs available from large technology companies combined with a more affordable housing market has caused many workers to migrate to Seattle from the Silicon Valley. The amount of Valley residents searching for homes in the Northwest quadrupled between 2011-2015.

This article profiles how ten years ago Amazon quietly created Amazon Web Services and how that has led to Seattle becoming the cloud capital of the world, attracting even more talent to the Northwest.

Despite the strong real estate and jobs market in Seattle, Venture Capital investments in the area are down so far this year. There has been 67 percent less capital invested in Seattle than this time last year apparently because of the sluggish global economy and fears of a tech bubble forming.

TUNNEL/VIADUCT

The tunnel boring Machine Bertha has reached its “safe haven” and will undergo maintenance for a month before it starts tunneling under the viaduct. Bertha has now made it 17% of its 1.7 mile journey.

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