What area is your expertise?
Seattle, Washington
What trends do you see presently in office development in your area?
There are currently 13 office projects of 100,000 square feet or larger under construction in the Greater Seattle Office Market comprising approximately 3.7 million square feet.
Who are the active office developers in your area?
Daniels Development Company, Vulcan Real Estate, Schnitzer West, Touchstone, Opus Northwest and Martin Selig Real Estate.
Please name one or two significant office developments in your area. What impact will these projects have on the market?
- 818 Stewart Building — Developed by Schnitzer West is due for delivery third quarter 2008. This is the first new Class A construction to be completed in the Courthouse district area of Seattle’s Central Business District (CBD).
- Fifth & Columbia — Developed by Daniels Development, it will become a key part of Seattle’s established financial district when it is completed in late 2010.
Where is the majority of development taking place? Why is this area doing well?
Much of the new construction in Seattle is occurring in the North CBD and South Lake Union areas. The North CBD houses the new federal courthouse and South Lake Union will be home to Amazon.com’s new 1.7 million-square-foot headquarter campus.
What area do you expect to be the next big development market? Why?
The area noted above will continue to loom large as it bridges the CBD, retail and South Lake Union markets.
What areas are doing well in terms of office leasing? Which areas are struggling with office leasing?
Activity in new construction is strong due to the fact that this is where a large user can secure contiguous space to accommodate their long-term needs.
Please give a measure of office vacancy rates. Please give a measure of available sublease space.
Office vacancy at the end of second quarter 2008: 8.6 percent
462,878 square feet of space available for sublease, counting for 1.24 percent of vacant space
What is the status of job growth/(un)employment rates and what bearing will it have on the office market?
Washington State and Seattle in particular have outperformed the national averages due to growth here in High Technology, Aerospace and Health Care. Research shows that vacancies have stabilized at the 8 to 9 percent levels and we expect rates to remain firm as a result.
Is there any type of office tenant absorbing a majority of space? What industries do you expect to expand in the next year to absorb a great deal of office space? What areas will be affected?
Microsoft has leased significant office space in the region in the last year and this is expected to continue. Professional services firms, highlighted by law and engineering firms are active, along with the federal government and other technology users are driving our market as well.
Submitted by Peter B. Truex, senior vice president with the Seattle office of Colliers International.