Seattle Office Space News – January 2017

News

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of January 2017.

OFFICE DEVELOPMENTS

The Schuster Group, which has been known locally for developing the Walton Lofts and other high end housing, has launched a new division called Full Scale that will focus on consulting, project management and real estate services to other developers. Full Scale’s first customer is the 202 luxury apartments that will be a part of the Rainier Square expansion. Construction on the mixed use project, which is mostly office is expected to begin this year and end in 2019.

Also, in January Hines Real Estate showed off some of the features of its $46 million dollar renovation at 800 Fifth Avenue in Downtown Seattle. Photos of the renovated lobby, restrooms, and elevators can be found here.

BUILDING SALES

Just one office building was reported to have traded hands in January.  New York based TriStar and RFR Holdings purchased the 290,647 square foot Urban Union building located at 501 Fairview Avenue in South Lake Union and 100% leased by Amazon. Schnitzer was the seller fetching $268.9 million or $925.32 per square foot, setting the new highest per-foot sale record.

OFFICE LEASES

Several technology companies expanded their footprint in January. Facebook announced in January that they leased the entire 150,621 square foot 1101 Westlake building, which brings their total footprint in the region to nearly 1 million square feet.

Another California-based company Snap Inc, (better known as Snapchat) leased nearly 50,000 square feet at the Market Place Tower. The space that Snapchat will move into was just recently vacated by Redfin.

Local tech titan Zillow is also expanding. The online real estate company leased the top two floors (38,000 square feet) for expansion at the company’s headquarters in downtown Seattle at 1301 2nd Ave.

ECONOMY

2016 marked the best year ever for the Seattle area housing market. The median home price increased by more than 12% in King, Pierce, and Snohomish counties in December alone, and there seems to be no signs of a slowdown with inventory at an all-time low.

Seattle economist Chris Medford talked with a panel about how the election of Donald Trump will impact the Puget Sound Economy. For the time being, he mentioned that there is unlikely to be a dramatic impact and that the tech sector growth will continue to fuel the market forward. Larger changes to NAFTA and other trade agreements will take more time and require congressional approval. Medford estimates that it will take twelve months before real impacts can begin to be seen or evaluated.

With the hot commercial real estate market there seems to be a new acronym being thrown around: “GAFA”. This of course is in reference to Google, Amazon, Facebook, and Apple all of whom have been expanding very quickly in Seattle.

Amazon alone now accounts for nearly 20% of Seattle’s office space inventory, the highest concentration of any single corporate entity in the country. Many experts predicted that Seattle would have started to see a slowdown in both the commercial and residential market by now. However, the explosive growth in the tech sector has created unforeseen demand for residential and commercial product, thus propelling Seattle past the typical slowdown. Experts are closely watching the moves of President Donald Trump as well as federal interest rates to see if they can predict if and when a slowdown might finally hit the Emerald City.

In an interview of  five of the Seattle area’s top venture capital firms,  those interviewed seemed bullish on the general market, number of IPO’s, and funding to the region for 2017. The full interviews can be found here.

TUNNEL/VIADUCT

Early in the year Bertha took a planned maintenance stop and resumed digging on the 18th of January. The Machine has now dug 6,822 feet of its 9,270 foot route.

Also in January, WSDOT began to brief business owners near the viaduct on the potential impact of the viaduct demolition. WSDOT stated that the structure will come down in phases and will last approximately nine months. WSDOT said that a general contractor will be hired by summer of 2018, at which time further details on how exactly the structure will come down will be released.

 

 

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