According to a Seattle Times real estate article, Seattle commercial real estate is experiencing lower vacancy rates and increasing rents. The expected decline in office vacancies is expected to continue, a good sign signaling an upturn in the economy. However, speculative office building isn’t expected to happen unless there is a big-name tenant, like Amazon, to commit to the space. So, if a company wants 50,000 square feet, there isn’t much in terms of current inventory. Currently, Class A office space is $32.98/sq.ft in Seattle, and $31.38/sq.ft in Bellevue. Read the article for more details.
Mark your calendar. The oldest skyscraper in Seattle, Smith Tower, is scheduled to go to auction on March 23rd. Known as the tallest office building west of the Mississippi until 1962, Smith Tower now sits 70% vacant. Monthly rents cannot cover operating expenses. King County values the 42-story tower at $21.3 million. This is an interesting opportunity to potentially own a Seattle landmark. Don’t break out your checkbook quite yet; the highest bidder must pay full price in cash at the time of sale. For more information, please view the Seattle Times article.
According to a national report by real estate firm, Grubb and Ellis Co., the second best city nationally for office and retail building investment over the next five years is Seattle. This is due to its growth in high-tech and biotech. The best city for office investment is San Francisco. For more details, view the news release.
Earlier this week, Prudential and Talon Private Capital purchased the 15-story Regence Headquarters building at 1800 9th Avenue for $76.5 million. For the 313,000 sq.ft building, that’s about $245 per sq. ft. Regence will lease back 30% of the office space for its own use. For more information, visit the Seattle Times article.
The Olson Kundig-designed Art Stable was a winner at the 2011 Honor Awards for Washington Architecture. Out of the 140 submitted projects, the “Art Stable” received one of four Honor Awards distributed that night. According to the release, the project was well-received by all of the judges, with one stating that it “improved the standing of architecture in the United States.”
Looking at the South Lake Union project, it is understandable why it received the award. The 6 units boast gorgeous 11-ft floor to ceiling windows, fantastic for catching sunset views across the South Lake Union neighborhood. The design is avant-garde and customizable, due to the units only being shell. Additionally, it has a wonderful environmental aspect to it, with environmental heating and even an electric car hook up. Welcome Nissan Leaf owners.
When I last checked, there were still units available in the Lake Union building. However, I suspect that it won’t be long until it has full tenancy. I cannot stop looking at these interior photos. It is gorgeous inside. I can only think of the endless possibilities of living or working in a breathtaking, award-winning building, such as the Art Stable.
Good news for commercial real estate landlords! According to a Seattle Times article, the office vacancy rate in Seattle fell over the past three months. For example, Lake View in Fremont was half empty in December and now it is fully leased. We can thank our expanding tech industry for that. Companies, especially tech companies, appear to be expanding and simply need more space. For example, Expedia recently leased out 55,000 sq. ft in Bellevue’s new Skyline Tower.
With growth and no speculative construction, vacancies in commercial space will continue to decline. This affects the average asking rents. As supply decreased, the average asking rent for Class A space rose to $32 per square foot. It’ll be interesting to see how the vacancy rate changes in the coming months. Hopefully, the buildings fill up, as that only translates to good news and growth for the Puget Sound.
A lot of major Seattle commercial real estate is changing hands in the last month. A good thing for a lot of people, but one that often gets forgotten is the local government which raise a lot of tax dollars when real estate changes hands.
Starbucks recently sold two office building in Pioneer Square for a combine $124.8 million. The properties were acquired by Spear Street Capitol based in San Francisco.
As I blogged this past May, Seattle’s Schnitzer West had two of their office buildings in the Denny Triangle for sale. Schnitzer recently sold the two Seattle office towers, 1918 Eight Ave and 818 Stewart St, for $480 million. JP Morgan Asset Management acquired the property. The deal was the biggest office transaction on the West Coast in 2011.
Westlake Center office tower in Downtown Seattle recently sold to the Teachers Insurance Annuity Association of America for $119.4 million. The sale was for the 21-story office tower and did not include the four story Westlake mall in which the tower is connected.
Two Schnitzer West buildings in Denny Triangle, 1918 8th and 818 Stewart, were put on the market for sale last week. They have a combined 900,000 sf and are a total of 94% leased. Although a selling price has not been set, the commercial market (esp. for office space) is doing much better than residential so good offers can be expected. In addition, a Seattle Times article reported in April that demand for office space was up in the first quarter. The 1918 building underwent a large transaction in March, leasing 406,000 sf to Amazon.com for their new headquarters, which will make the move in July. Please refer to this article for more details on the commercial properties for sale.