Seattle Office Space News – July 2016

News

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

OFFICE DEVELOPMENTS

This month Expedia scaled back initial plans for expansion on their new Elliott Bay campus. The travel giant had initially planned to renovate 600,000 square feet of lab into office space as well as construct a new 600,000 square foot building. It now seems that Expedia will just renovate the labs and construct the new building when needed.

BUILDING SALES

The amount of foreign capital being poured into Seattle did not slowdown in July. Korean based Mirae Asset Global has acquired Amazon Phase VIII for $246.8 million from Vulcan Real Estate. The 317,000 square foot building was completed last summer and sold for nearly $770 per square foot.

Also this month, GLL Real Estate Partners and Vestas Investment Management (Munich and Seoul based) purchased the 793,679 square foot Safeco Plaza building from CommonWealth Partners for $387 million. The building is 98 % leased and sold for $488 per square foot.

OFFICE LEASES

The big news in office leasing this month was the announcement that law firm Davis Wright Tremaine will be the anchor tenant for the new Madison Centre development at 5th & Madison in the central business district. DWT will occupy eight floors or 164,000 square feet of the ~764,000sf  project that is expected to open in 2017.

The South Lake Union submarket of Seattle continues to be on fire as Nanostring Technologies expanded by 19,000 square feet at 500 Fairview Ave N, bringing their total footprint to 76,800. In addition stealthy Silverback Therapeutics will be taking 19,600 square feet in the same building.

ECONOMY

Little signs point to a slowdown in Seattle, even with global markets cooling off after a Brexit vote as well as an anticipated fed rate hike. Seattle’s regional population is growing at a historic pace, adding 86,320 residents year to date. Many economist wonder if this face paced growth will lead to Seattle becoming the next Bay Area, or if we will see a slowdown. One DJC reporter noted that as along as Amazon continues to grow, so will the Northwest. With that being said, many think that the housing market will begin to “cool” in 2018 when it is expected that the Fed will increase rates a few more points.

Adversely, a slowdown in VC investing during in the second quarter reduced investing to its lowest level since 2014. The slowdown in the VC market can be an early sign of investor skepticism of the future.

TUNNEL/VIADUCT

Tunnel boring machine Bertha took a planned maintenance stop this month to repair cutting tools. Workers had to endure high pressure environments to repair each cutter “tooth” that weighs over 75 pounds. A video of the repair can be found here.

In addition, here is a video showing how WSDOT is installing the double decker highway piece by piece once bertha has passed by. Bertha has now traveled about a third of its total distance and seems to be on pace – finally! This month WSDOT put the price tag of the delays thus far at $233 million…

OTHER NEWS

This month Trupanion opened the doors to its new 70,000 square foot headquarters in the Georgetown neighborhood, with plenty of room for its employees and pets.

Finally, Biomed realty has opened a “biotech startup space” in the 201 Elliott building, which aims to give emerging Biotech companies access to ready to go lab space.

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