Seattle Office Space News – June 2019

3/ July 2019

Below are
comments and links to news articles and other topics relevant to the Seattle
office space market from the month of June 2019.

OFFICE DEVELOPMENTS

Office development projects
continue to surface throughout Seattle with Touchstone and Portman Holdings
based out of Atlanta having been selected by University
District Parking Associates
to develop a mixed use office, retail, and student
housing project in the University District. Lot A located at 4530 12th
Ave NE will include a 190,000 square-foot commercial office building. Lot B
located at 4536 Brooklyn Ave NE will include a 155,000 square-foot office tower
with retail shops and below grade parking. Project completion is scheduled for
2023 and the U-District light-rail station is scheduled to open in 2021.

Also, Alexandria Real Estates Equities bought the Copiers Northwest headquarters located at 601 Dexter Ave N in South Lake Union for $28.5 million from Base Properties LLC. Plans for the property are unknown, but the zoning allows for a 200,000 square-foot property. Base rents in South Lake Union have risen to more than $50 per square foot.

OFFICE LEASES

June raked in reports of eight significant office leases.  Most significantly, Apple confirmed that they have leased a massive new office in South Lake Union. The project, 333 Dexter has two 12-story office towers with 630,000 square feet. The complex will hold roughly 3,000 to 4,500 workers. Apple also has office space at Two Union Square (601 Union St) with room for 500 employees. Kristina Raspe, VP of global real estate stated that by the end of 2019, 200 new employees will be hired. Over the next five years, apple will hire 2,000 employees.

It was also reported in June that SAP Qualtrics will lease 300,000 square feet in Skanska’s 2+U tower located 1201 2nd Ave in Seattle’s Central Business District.  If this is true, 2+U will be fully leased by the time it opens, which reward Skanska for going spec with the development. Other tenants who have announced they will occupy 2+U include: Indeed, Dropbox, and Spaces. Below the office portion will be retail space, art/cultural space and restaurants.

Accolade, an on-demand personalized advocacy and population health solution, is outgrowing their Seattle office. The tenant currently has an office at 701 Pike St, but a building permit application showed a planned $2.5 million tenant improvement for floors 17 and 18 at 1201 Third 3rd Ave in the central business district. The two floors combined are roughly 45,000 square feet and have room for roughly 300 employees.. Accolade was founded in Philadelphia and opened a second headquarters in Seattle in 2015. The company had 1,000 employees in 2018.

Coworking space provider CommonGrounds Workplace signed a 10-year lease at 1100 Dexter Ave N in South Lake Union for 31,780 square-feet. The company is based in San Diego and has eight locations across the country. The space will accommodate over 400 members and is expected to open next spring. The company uses a proprietary demountable wall system that allows space and infrastructure to be changed out in weeks rather than months. To learn more about the technology and company click here.

There were reports in June speculating  WeWork may sublet more than 40 percent of Amazon’s space in Rainier Square tower at 4th & Union in the Central Business District. Various sources in the commercial real estate industry state that WeWork may be considering 200,000 and 300,000 square feet of space. Both WeWork and Amazon’s brokerage team declined to comment. WeWork has leased almost 1.7 million square feet of space in the Puget Sound region.

Leafly, a cannabis website that gets 22 million visits per month and allows users to rate and review strains of cannabis and dispensaries, is moving into a larger office in Seattle. The company leased 50,000 square feet at 333 Elliott Ave West in Seattle’s North waterfront submarket. The headquarters will have room for 330 employees and will be ready later this summer. The company expects to double its workforce by end of 2019. Most employees are located in Seattle; however 25 people work in Baltimore and a few employees work in Toronto and Berlin.

Sonos, based out of Santa Barbara, leased 40,000 square feet at 800 5th Ave in the Central Business District. The company currently has 160 employees in Seattle and the new office space can accommodate up to 240 people. Sonos is currently operating out of a WeWork downtown and in a space in Capitol Hill’s Bullitt Center, but will vacate the offices once it moves to its new space. Unispace is renovating the new office space and Sonos will move in as soon as the renovation is complete.

OnePiece Work is a new co-working space in Seattle founded by Wei Guo leaed 8,500 square feet at 720 3rd Ave in the Central Business District.  Guo, who has backed more than 300 startups, has a goal of providing its members exposure to international markets and Guo told Geek wire “we focus on people who want to expand globally.” The company wants to bring stronger connections to U.S and China which are the top two technology markets. Additionally, Guo is looking to invest in Seattle-area startups in real estate, food tech, IoT, and e-commerce.

OFFICE BUILDING SALES

A few large office projects changed hands in June.  EQ Office, owned by Blackstone, bought 999 Third (999 3rd Ave) and U.S. Bank Centre (1420 5th Ave) for $1.2 billion. The company plans to spend $89 million repositioning the Central Business District assets. EQ plans to make the 999 Third and U.S. Bank Centre buildings more welcoming for the new generation. They are currently in the process of selecting designers.  Six months ago, Blackstone purchased 800 Fifth (800 5th Ave) for over $540 million. EQ has invested in 3.1 million rentable square feet in Seattle.

Also, RREEF sold the 199,080 RSF center to DivcoWest. The development is a full block and reaches from Westlake to Dexter Avenue North, has 485 parking spots and a large central atrium. DivcoWest based out of San Francisco has acquired 430 buildings and invests on behalf of the California State Teachers’ Retirement System and others.

ECONOMY

Seattle continues to lead the nation in technology related jobs. STEM jobs increased in Seattle by more than 8.0 percent from 2015 to 2018 and is now home to 230,000 employees in STEM-related roles. Washington may have 45,000 jobs unfilled from 2017-2021 because of lack of qualified candidates.

Hired reported the latest State of Salaries in June and among its findings, Seattle tech salaries average $138,000 only behind Bay Area’s $145,000. Over the past four years Seattle tech salaries have had a 10-percent jump. Other findings from Hired’s report show that full stack engineers are most in-demand in the U.S., black tech workers are paid the least, Asian tech workers are making more than their white counterparts and tech-workers make the most money in their 40s.

A new study finds that all five Puget Sound region jobs that pay $100,000-plus are related to the technology industry. The only area with more six-figure jobs than Seattle is San Francisco. The jobs include senior developer, lead engineer, mobile developer, data scientists and product manager. To read more about the findings click here.

TRANSIT

Now that the new Highway 99 tunnel is operational, drivers who use it regularly will be interested to know that tolls will go into effect sometime this fall.  The tunnel opened in February and tolling hasn’t begun yet because alternate roads and the toll-billing company aren’t ready. 

ARENA

In June it was announced that Symetra Life Insurance has signed on as Seattle’s future NHL sponsor and partner.  A naming sponsor has yet to be named for the $930M arena, which is currently under construction. 

OTHER NEWS

Expedia’s new campus located on Elliott Bay along Seattle’s North waterfront will open this fall. The company is relocating from Bellevue and is offering employees $5 every day they use transit, van pool, bike or walk to discourage people from driving to work. However, the campus will include 2,300 parking spaces and they could add more. The move will begin this fall and over 4,500 employees are expected to move to the campus by February. By 2031 there could be up to 8,000 employees. A light rail is not expected to open near the campus until 2035. To read more about how Expedia plans to avoid the traffic mess click here.

The F5 Tower is one of nineteen developments competing for the 2019 Urban Land Institute’s Global Awards for Excellence. The tower located at 801 5th Ave in Seattle’s Central Business District is 750,000 square feet, includes a 48-story office and hotel building. The building was selected for how it has considerably improved the community in which it is located. The competition includes developments from North America, Asia and Europe. The winner will be announced during the Urban Land Institute’s September meeting in Washington D.C. There were several companies that came together to make the project possible. To read more about the collaboration, planning and design that went into constructing the tower click here.

Written by // flinn

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