Seattle Office Space News – June 2016

News

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

OFFICE DEVELOPMENTS

Once the tallest building west of the Mississippi, the Smith Tower has had its share of ups and downs. Unico properties recently purchased the building and has already started filling up the building and making capital improvements. Most notably, in August the famous 35th floor observation deck will re-open with a speakeasy and a new private deck.

BUILDING SALES

In June Schnitzer West and Investcorp purchased the 41-story office tower 901 Fifth Ave from Kennedy Wilson and RREEF North America. The group paid $233.3 million or $431.56 per square foot for the 540,600 square foot building.  Schnitzer added the building to their central business district portfolio, which is within a block of their 36 story Madison Centre office development.

OFFICE LEASES

Spokespeople for Avalara confirmed in June the rumors that the company leased the top six floors of the new Hawk Tower development at 255 S King Street in Pioneer Square. Avalara will control over 100,000 square feet in the new 215,000 square foot development.

WATG architectural group opened a new Seattle Studio. The 5,700 square foot space in the Olympic Tower at 217 Pine Street will focus on commercial, residential and hospitality projects.

ECONOMY

There seems to be no sign of a slowdown in the Seattle area economy. There are currently sixty-five projects under construction in downtown Seattle representing a ten-year peak.  Two thirds of these new developments are residential, which makes sense given  the extremely hot housing and apartment market. Redfin ranks Seattle as one of the top three hottest markets for sellers with 60 percent of homes closing within two weeks. In May, the median price of a single family home in King County surged to $560,000, representing an increase of over 16.5 % from this time last year.  This increase means that Seattle area homes are rising twice as fast as the national average. In connection, the average rent for an apartment in King and Snohomish County increased 4.1 percent since the end of March and vacancy decreased to fewer than 3.9%. This is the lowest vacancy rate reported since 2005.

In more sobering news, a new report from Redfin showed that less San Francisco residents are searching for homes in Seattle. Last year 5.1 % of searchers in the Bay looked to Seattle and this year that figure declined to 2.8%, which may be evident of the prices in Seattle nearing that of the bay area.

As with much of the country, Seattle area stocks took a tumble with Brexit news. The most exposed US companies were in the export industries such as aerospace, agriculture, and technology. Experts predict that the exit will have minimal impact on the regions real estate market given the relatively small amount of UK investors here.

TUNNEL/VIADUCT

The giant tunnel-boring machine Bertha halted for a planned maintenance stop in June. The machine took its break 120 feet below Post Ave and so far has bored 3,088 feet of the 9,270 feet of total distance. If all goes to plan (big IF), the tunnel will open in spring of 2018.

OTHER NEWS

Local tech beat Geekwire awarded Axon with “Geekiest office,” in Seattle.  The space features a retinal scanner, matrix style chairs, and a plethora of other futuristic features.

Finally, in June Martin Selig donated $5,000 to fight the viaduct park that he once promoted. Selig’s reason for the change is that the plan now requires expensive retrofitting of the existing structure which would make the project nonviable in his opinion.

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