Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of August 2017.
Two new proposals for large Seattle office developments emerged this month. BioMed Realty out of San Diego plans to build a two tower, 14-story building on the block of 700 Dexter Avenue North. The project is still in early stages but has listed an early design meeting with the city, and is planned to have nearly 350,000 square feet of office space. The second development revolves around the old Pemco headquarters campus off of I-5. Unico Properties is in early plans for a six-to-eight story building on the site at 330 Yale Avenue North. Amazon is reported to have leased the old Pemco main building, which has just undergone a new paint job complete with Amazon orange detailing..
In this month’s largest acquisition, Clarion Partners bought Tableau Software’s new headquarters, NorthEdge, for $157.85 million. The New York-based company purchased the four-story building from Touchstone and AIG Global Investment group, adding the brand new location to their portfolio of Puget Sound properties. Tableau inked an 11 year lease with Touchstone before the building sold, with two 7-year extension options.
Also, one of Seattle’s oldest commercial brick buildings at 1012 First Avenue sold again this month for $15.5 million just three years after being purchased for $4.3 million. The once ill-reputed location is a perfect example of the power of renovation and new tenant affiliation. The building is now home to Cone & Steiner General Store, office tenants on the upper floors, with trendy boutique Moorea Seal set to move in soon.
Amazon is showing no signs of slowing down in its endless Seattle land grab. The ever-growing tech giant is now close to leasing the entire office portion of the new high-profile Rainier Square project in downtown Seattle. The project includes 52 stories of office along with 12 stories of hotel, totaling 710,000 square feet. Construction on the new building is set to begin in the next few months.
Fast-growing Seattle startup Outreach has moved its headquarters into a former Tableau building in Fremont. The 26,000 square foot space is located on the ground floor of 1441 North 34th Street, and gives the company the room it needs to house its ever-expanding headcount.
Female-focused co-working space The Riveter has leased its second location less than six months after opening its first location in Capitol Hill. The company, which won this year’s GeekWire “Newcomer of the Year” Award, has leased new space on North Northlake Way in Fremont. After raising a $760,000 seed round earlier this year, The Riveter is riding their success with further plans to continue its growth. Their new location is officially set to open on September 11.
Amazon now occupies 8.1 million square feet in Seattle – as much as the next 40 biggest companies combined. The tech company’s success has turned Seattle into America’s largest “company town,” drawing talent from across the country and rapidly changing the face of the city. Even with this enormous footprint, Amazon isn’t done. Within the next five years, Amazon is set to occupy over 12 million square feet in Seattle.
Construction costs in Seattle continue to climb, though two new reports indicated that the market may be slowing down. Component costs and construction employment have finally leveled out this quarter. Still, the remainder of 2017 is set to see overall construction costs increase another 3.5 to 4 percent.
As summer winds to a close, the Seattle housing market has remained red-hot, leading the nation in home price growth for the last ten months.
The Seattle area now has 38 “$1 Million Dollar Neighborhoods.” According to GeekWire, this Zillow criterion requires at least 10% of homes in a zip code to be valued at over seven figures. This news puts Seattle amongst the top hottest markets in the US.
The median home price in the Seattle area is $450,900, having risen almost 13% in the past year. At the peak of the housing bubble before the Recession, it was $380,200.
These skyrocketing prices, however, are not indicative of a bubble economy according to Zillow experts, as they are being caused by a lack of supply and a sharp increase in demand. The report suggests increases are not infinitely sustainable, and have already showed signs of slowing, especially in the higher end market.
The giant tunnel-boring machine Bertha has officially been completely dismantled and removed. Cranes lifted the final pieces out at the end of August, bringing an end to the journey that began over four years ago in 2013. Now, crews can continue working on the the new double-decker freeway. The tunnel is estimated to open in 2019. You can watch a video of Bertha’s final disassembly here, and a time-lapse of the entire dismantling process here.
The KeyArena renovation project is in first position for approval, with the Memorandum of Understanding (MOU) for the project due on September 12th. Oak Venture Group and the City are hopeful that they will have a final deal achieved before the year’s end, and that KeyArena will be properly renovated for NBA and NHL use.
However, Chris Hansen’s group is still fighting to keep their SoDo stadium project alive. A recent study claimed that the SoDo project would provide 3 times more tax revenue than a KeyArena renovation, though it failed to take into account opportunity costs of each project. Hansen’s SoDo stadium is likely a long shot, especially with the Port of Seattle so avidly against another stadium in the SoDo district, and his MOU depending on the acquisition of an NBA team. However, it’s still too early to tell whether or not the project is officially dead.