SEATTLE, May 4, 2016 – The latest report from Cushman & Wakefield/Commerce shows an increase in business growth throughout Seattle’s office market as vacancy rates decreases. The firm released its first quarter Marketbeat Snapshot report detailing the Seattle and Puget Sound Eastside areas’ office markets.
The Seattle-Tacoma-Bellevue unemployment rates increased for the fourth consecutive quarter to 4.8 percent, however so has the labor participation rate, indicating that more people have moved themselves into the workforce.
“The outlook for commercial real estate in the Seattle area is very promising as the trend of decreasing vacancy rates continues,” said Dave Magee, market leader – Washington region with Cushman & Wakefield/Commerce. “The high-tech sector is again leading the charge, and we should continue to see the expansion of the office market to the tune of several million square feet of new office inventory coming on-line in the next couple years.”
The Seattle CBD market started 2016 with an overall vacancy rate of 7.5 percent, a year-over-year decrease of 2.4 percentage points. Compared to first quarter 2015, the area experienced a 12 percent increase in leasing activity, with 601,369 square feet leased. Amazon signed the largest lease of the quarter, and the 12-story, 291,000 square foot office building will be delivered second quarter. Expect rental rates to increase as large blocks of space continue to be quickly leased-up. Although asking rates and overall vacancy in the CBD have been stable on a quarter-over-quarter basis, rates should increase considering the high demand in this market.
The Seattle suburban market first quarter leasing totaled 137,964 square feet. As the trend of vacancy decreased and asking rates increased, the market saw a dip in vacancy by 1.6 percentage points to 16.3 percent. The most notable transaction during the first quarter was the three-building, 218,585 square foot office sale of The Creeksides at Centerpoint in Kent for $26.5 million. The suburban market continues to benefit from the rising rent and limited availability in the CBD and Eastside, and should expect to see an increase of interest from companies looking to expand.
The Eastside office market kicked off 2016 with an overall vacancy rate decrease of 1.1 percentage points to 9.7 percent. The market also experienced a decrease of 102,000 square feet of leasing activity from first quarter 2015. The most notable transaction of the quarter was the Offices at Riverpark in Redmond. The 106,281 square foot fully occupied class A building sold for $36.9 million. The outlook for the Eastside remains optimistic. REI’s announcement of a possible relocation to Bellevue by 2020, the delivery of 1 million square feet of class A space, and the relocation of Expedia to Seattle CBD by 2019 shows positive movement in the marketplace.
About Cushman & Wakefield/Commerce
Cushman & Wakefield/Commerce operates the Cushman & Wakefield business in Idaho, Nevada, Utah and Washington. The firm partners with its sister company Cushman & Wakefield/NorthMarq to provide innovative commercial real estate solutions to occupier and investor clients, offering transaction services, capital markets services, occupier and investor services, and real estate advisory. Together the firms manage 52 million sq. ft. of retail, industrial, and office assets, have transaction revenues of more than $2 billion, and employ more than 750 professionals. Learn more at www.comre.com.
About Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. The firm’s 43,000 employees in more than 60 countries provide deep local and global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.