Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of December 2015.
Continuing the trend from all year, the month of December was filled with announcements for office developments. First, Vulcan revealed plans for the Lakefront Blocks on Valley Street in the South Lake Union submarket. The three block area will contain 787,000 square feet of office space and approximately 370 apartments. Vulcan has stated the office space would not be constructed without a tenant, so a start date is yet to be set. You can view a slideshow of the proposed development here.
Just to the south, Amazon has begun moving into the first phase of their new Seattle campus. The entire project is nearly four million square feet of office space complete with meeting centers, indoor basketball courts, and a rooftop dog park. So far only two of the three towers are completed and Amazon recently announced construction on the third will begin in the fall of 2016.
In a major milestone, the Rainier Tower project at 5th & Union has obtained a master use permit from the City of Seattle. Developer Greg Johnson of Wright Runstad stated that construction will begin in 2017 because they “plan on having tenants by then.” Wright Runstad is talking to several different office and retail tenants as well as a hotel operator that would be new to Seattle.
Also in the financial district, Martin Selig will be adding 12 floors of apartments atop 36 floors of office at the former Federal Reserve site. These new apartments would be across the street from Crescent Heights’ planned 101 story 4/C tower. Both developers are hoping to create a 24-hour neighborhood in an area that has been traditionally quiet after business hours.
In December Selig also closed on the purchase of the Firestone tire center site at 400 Westlake Ave N in South Lake Union. Selig paid nearly $17.5 million or $900 per square foot for the land and has plans to construct a 190,000 square foot office and biotech building. A timeline for the start of construction is not yet clear.
In the aftermath of a political scandal, the proposed Civic Square development for the block between Third & Fourth Ave and James and Cherry Streets is clinging to life. The City has given the previous developer Triad, who has been working for eight years to develop a 43 story office and condo building on the site, 60 days to assign its rights in the project to a new partner.
Talon Capital completed an $11 million makeover of 720 Olive that has dramatically changed the exterior entrance as well as the lobby. The lobby now contains a restaurant/bar, and juice bar. Legal technology company Avvo recently moved their headquarters to the building, and there will be an additional 92,000 square feet available in 2017.
Finally, Beacon Capital filed plans for the redevelopment of the historical Maritime building located at 911 Western Ave along Seattle’s waterfront. The plan calls for an eight story addition, which would contain two floors of office as well as six floors of apartments. The plans will have to be approved by the City’s historical preservation board.
In general, building sales in 2015 brought an interesting trend regarding the amount of Asian capital chasing Seattle commercial real estate product. The most notable statistic is that one fifth of Seattle’s office sales in 2015 went to Asian firms, including the tallest skyscraper in the Northwest – Columbia Tower.
Office building sales in South Lake Union continued in December with 400 Fairview selling for $234.8 million or $763 per square foot. The building was sold by developer Skanska to TIAA-Cref, although Skanska will retain a 10% ownership stake.
In the Pioneer Square submarket of Seattle, a Chicago based co-working company acquired the Pioneer Building in December. The company paid $20.5 million for the 72,000 square foot office building (~$285/sf) and has plans to renovate the space into a co-working facility.
Just down the street there will be a new collaboration between developer Greg Smith, ACT Theatre, Cherry Street Coffee and artist Jane Richlovsky. Together the group, named Good Arts, purchased the 1st & Cherry building for $4.5 million. Good Arts plans to create a collaborative environment for Artists in the space.
Although it has been rumored for some time, in December it was announced that Docusign will lease six floors, or 119,000 square feet, at 999 3rd in the central business district of Seattle. In the same building, owned by Ivanhoe Cambridge and Callahan Capital Properties, Moss Adams LLP recently completed a renewal for 77,274 square feet. Additionally at 999 3rd, law firm Hillis Clark Martin & Peterson P.S. recently signed a lease for 31,000 square feet and senior living community operator Leisure Care will be moving in to 25,200 square feet.
News in December also confirmed that WeWork will lease 32,000 square feet at Westlake Tower, which is their 3rd Seattle location. The coworking space provider indicates that the space at Westlake Tower will provide enough room for 600 members.
2015 closed with lots of news regarding the red-hot housing market in Seattle. Seattle is now the 8th most expensive city to rent in the nation according to Zillow, with an average rent of $1,922 per month. A report by Forbes also stated that Seattle ranks number 10 for cities building the most single and multifamily homes. This article indicates Seattle has the fastest rising home prices in the nation with Seattle area homes reportedly worth $41 billion more than this time last year.
A mobile processing company, Invoice2Go, has named Seattle as the number one city for small business based upon revenue invoiced. Seattle was nearly $23,000 higher than the second place city of San Francisco.
In the first good news since 2013 regarding the replacement of the Alaskan Way viaduct, the tunnel boring machine Bertha is fixed and seems to be running smoothly. According to Seattle Tunnel Partners, Bertha is scheduled to break out of the repair pit at the end of January 2016 and resume tunneling the remaining 8,000 feet in March.
Here is a look inside the new Allen Institute building.