Seattle Office Space News – November 2016

News

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

OFFICE DEVELOPMENTS

Several large technology office buildings were completed in November. The first was Tableau Software’s 208,000 square foot NorthEdge campus near Gas Works Park in Fremont. In addition, Amazon opened the second tower of their newest development in downtown Seattle. The 36 story high rise opened just eleven months after the first 36 story building to the north opened to employees.  Amazon also started construction on a third tower in November that will include a 37 story building totaling 1.1 million square feet of office at Westlake and Lenora.  Together with phases one and two, the E-commerce giant will have nearly 3.3 million square feet of newly developed space in the Denny Triangle area to go along with their original campuses in the South Lake Union submarket.

At the Southern end of Seattle, American Life is moving closer to completion of the Avalara Hawk Tower. Construction crews are working on floor 16 of the 18 floor office building totaling 186,684 square feet.

Finally, Martin Selig changed plans again for the former Federal Reserve Branch in downtown Seattle. Originally, the plan was to add a 660 foot tall apartment and office tower, but now the plan has shrunk to just five stories. The five story office addition would bring the total space available to 154,400 square feet and is set to be reviewed by the City on December 6th.

BUILDING SALES

November was a relatively slow month for building sales in Seattle as there was news of only one building changing hands.

New York based Tristar Capital and RFR Holdings purchased Amazon Phase VII for $244 million or $765 per square foot. Here is a look at a list of the top 10 office sales of the year in the region. Not surprisingly, three of the four largest sales in Seattle were of Amazon occupied buildings.

OFFICE LEASES

Surprise surprise, Amazon dominated office leasing news this month with the announcement that it will be leasing all of Midtown 21. The 365,000 square foot building at 1007 Stewart Street will be completed mid next year.

Big Fish games also inked a large lease in November taking the 187,000 square foot remodeled and expanded Maritime building. The move will take place in 2018 along the revitalized Seattle waterfront.

Also, Atlas Workbase which is a co-working provider just opened a new 20,000 square foot facility at 500 Mercer. Atlas seeks to cater towards all users rather than solely focusing on the tech scene.

Another technology company, RealSelf, has doubled their office footprint. The rapidly growing online community for people seeking cosmetic procedures leased at least 24,000 square feet in the 83 King building.

ECONOMY

In a surprising turn of events for many Americans, Donald Trump was elected the 45th President of the United States. Now that he is President elect, the controversial figure has received public support from many Seattle based executives, even those that previously publicly opposed him.

Jeff Bezos, Satya Nadella, Boeing, and Starbucks all offered support moving forward. Jeff Bezos said “ I for one give him my most open mind and wish him great success in his service to the country”.

Immediately following the election many Seattle biotech stock prices soared 10-16%. Investors were worried that if elected, Hillary Clinton would increase regulations on drug prices thus hurting the bottom line of many Biotech and Pharma companies.

One local economist of Windermere Real Estate believes that Trump will bring forward deregulation allowing banks more latitude to lend to homeowners, thus helping the local residential real estate market.

In Seattle’s local election, voters approved the $54 billion dollar Sound Transit Proposal. The new measure will bring 62 miles of light rail, plus bus and heavy rail service to the area which proponents hope will curb mounting traffic problems in the area.  In addition, voters passed an initiative to increase minimum wage to $13.50 by 2020.

Outside of election season, more news relevant to the Seattle economy was released in November.  Investors continue to pour billions into commercial real estate. Excluding homes, foreign investors have spent nearly $4 billion on local assets since 2015 ranking Seattle as the number 5 city in the country for foreign investments.

It is no surprise that people see Seattle as an attractive place for investment as the city continues to add 311 new jobs every week and is consistently ranked in the top ten US cities for Job Growth.  The Pacific Northwest has become highest in the nation for U.S. job growth according to the U.S. Bureau of Labor Statistics.

This month the UW Runstad Center released data that for the third quarter the statewide median for single family home prices rose to $305,000, 4.3 % higher than last year.

Seattle is now the hottest housing market in the nation. According to S&P Case Shiller, Seattle’s home price increase of 11% year to date earns the Emerald City the top spot.

All metrics seem to show positive signs for the local economy, even among those fearing that we are due for a correction. At the annual Urban Land Institute summit, experts predict a soft and slow correction for the Seattle market if any at all.

TUNNEL/VIADUCT

The giant tunnel-boring machine Bertha has finally reached the mile mark along its 9,270 foot journey. Construction started in 2007 and is slated for completion in 2023.

In addition this month it was revealed that the WSDOT is testing a new bridge as part of the viaduct replacement that is designed to bend back to its original shape after a magnitude 7.5 earthquake.

In negative news for the Waterfront Redevelopment, The Seattle Historic Waterfront Association, the alliance for Pioneer Square, and many others are challenging the redevelopment plan saying that it will cause gridlock and fail in its current form.  Although many are openly opposing the plan, they are confident that all issues will be resolved before construction begins.

OTHER NEWS

Finally, here is a look at Tableau Software’s new office space in the NorthEdge building referenced above.

Also, here are photos of the CoMoton HQ at the University of Washington, which is designed to be a hub for innovative companies, were released in November.

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