Seattle Office Space News – December 2016

News

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

OFFICE DEVELOPMENTS

At the close of 2016, Seattle’s office development boom showed no signs of a slowdown. Martin Selig’s plans for The Landmark Building at 1015 Second Ave (former Federal Reserve) will have seven new stories of office space creating a total of 223,000 square feet. Selig hopes to start construction in 2017 with a 15 month build time.

Selig also revealed plans this month for the former Firestone Building at 400 Westlake Ave North in South Lake Union. Early renderings show that Selig plans to maintain the façade and add twelve stories of office space, totaling 230,000 square feet. Again, he hopes to start construction in 2017 with a 15 month build time.

In Pioneer Square, Urban Villages Inc. released plans to redevelop the block where FX McRory’s currently operates. The Denver-based company plans to add shops and restaurants in the alley between the Manufacture’s Building at 419 Occidental Ave South and the Westland Building at 100 S King Street and also the Schoenfeld Furniture Building at 115 S Jackson. The alley will receive new lighting and paving to create a more friendly pedestrian experience while the Schoenfeld Building will have one floor added to the structure. Renderings can be found here.

Surprise surprise, this month public records indicate that Amazon acquired another chunk of land in the Denny Triangle neighborhood near their headquarter campus. Amazon affiliate Acorn Development paid $19.2 million for a half block along Seventh Avenue between Blanchard and Bell Streets, directly across from the recently opened Day One Tower.  The site will likely be the location of another new building for Amazon.

Another Seattle tech giant began construction on its new campus on Elliott Bay to the North of downtown. Expedia is swinging hammers to convert old lab space formerly occupied by Amgen into office. Expedia plans to move from Bellevue to the new campus in 2019 and could add up to 1.9 million square feet on the property.

BUILDING SALES

There were no building sales reported in the month of December.

OFFICE LEASES

Not long after its new headquarters opened in Seattle, Bay area based Facebook inked another large lease in the South Lake Union submarket of Seattle. The social media giant will occupy 384,000 square feet along Eighth Avenue North between Thomas and Harrison Streets. The buildings, owned by Vulcan, are scheduled to be completed in the third quarter of 2018.

Amazon continued its expansion spree into December by leasing the Westlake Terry building that Microsoft currently occupies in South Lake Union. The 320,000 square foot building is just one peg in the massive expansion of the E-commerce giant; it is estimated that they will occupy 12 million square feet in Seattle by 2022.

ECONOMY

According to the S&P CoreLogic Case-Shiller National Index, Seattle maintained its status as the nation’s hottest housing market in part due to the ever-increasing tech job growth in the region. Seattle experienced a 10.7 percent year over year price increase to hold on to the top spot in the nation. The Seattle region now has 10 of the nation’s 30 most competitive neighborhoods for house hunters according to Redfin. Another factor adding to the surge in demand was the rise of interest rates, which caused purchasers to rush to close on homes. This resulted in a 30% increase in total sales from this time last year.

The unemployment rate of the Seattle-Bellevue-Everett area was just 3.7 percent in November according to the Washington State Employment Security Department, down from 4.7 percent a year ago. Construction, healthcare, and especially the technology Industry have spurred the drop in unemployment.

Not surprisingly, the Seattle region ranked eighth among the nation’s largest cities for patent awards according to the U.S. Patent and Trademark Office, fueled by companies such as Microsoft, Boeing, and Amazon.

This podcast from Geekwire makes an interesting point regarding the effect on tech workers of large Silicon Valley companies establishing footprints amidst the Seattle area startup scene.  These companies challenge the entrepreneur community as workers weigh the risk of a career at a startup versus a stable and sizable paycheck at a company such as Google or Facebook.

TUNNEL/VIADUCT

Finally, tunnel boring machine Bertha is starting to make its way towards the surface after reaching its lowest point in November, the machine is now about 70% complete with its journey. The final completion date for the project is now 2023. However, not everyone in Seattle is thrilled with Bertha’s progress. Many business owners along the viaduct have claimed loss of income and disturbance from the vibrations, noise, and other distractions that have come with the delayed project.

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