Seattle Office Space News – May 2017

5/ June 2017

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of May 2017.

OFFICE DEVELOPMENTS

This month Geekwire took a look at how Amazon, Paul Allen, and Clise properties have worked together to change the landscape of Seattle and its real estate footprint forever. Clise properties is a multi-generational real estate firm that originally purchased properties in the Denny Triangle after the depression. Those properties are now home to the massive Amazon world headquarters. Similarly, Paul Allen had control of a large swath of land in South Lake Union that he wanted to donate to the city for a park, when the vote failed; Allen began to develop the land, the majority of which would be occupied by Amazon. At the end of 2016, Amazon had approximately 8.5 million square feet in Seattle and it is estimated they will occupy 12 million by 2022.

Also in May, Amazon announced that Mary’s Place, a Seattle based homeless shelter, will occupy 47,000 square feet in Amazon’s new 24 story office development on the block bound by Seventh Ave, Blanchard Street, Eight Ave, and Bell Street.

Another massive development by Vulcan has started in South Lake Union. This time, the anchor tenant will be Google, which will occupy about 600,000 square feet of office space on the two block site directly to the south of MOHAI in South Lake Union.

BUILDING SALES

Two buildings were reported to have traded hands in Seattle in May. The first is the Frank Gehry designed home to Facebook in south lake union.  The ten story 351,731 square foot building known as Dexter Station sold for $286 million or $813/sf and it is not immediately clear who the new owner is.

The second building that traded hands in May was Freemont Village Square, a 42,840 square foot building in the Fremont Neighborhood at 3601 Fremont Ave N. Local investors Eric Guenther, Dan Ederer, and Colin Madden paid about $16.6 million for the property that is approximately 70% vacant.  The group plans major upgrades to the building and will be aggressively looking for tenants.

OFFICE LEASES

In a surprising move to many, F5 networks announced that they will be leasing all 516,000 square feet of office space in the new Mark Tower being developed by Daniels Real Estate at 801 5th Ave.  The name of the new tower will change to “F5 Tower”. The tower will also contain a luxury SLS hotel on floors 3-15. Here is a statement from F5: “Our move to F5 Tower will provide current and future F5 employees with an iconic, modern corporate headquarters that aligns with our growth as a company and showcases our significant place in Seattle’s technology industry. The new space will provide a dynamic work environment that will help attract top talent, while giving us room for continued growth.”

ECONOMY

Once again, Seattle topped the nation in population growth, rental increases and average home prices.  Seattle is now the nation’s fastest growing city and has just hit a population of over 700,000.

In relation, Seattle continues to have the nation’s fastest rising home prices with the year over year increase in March hitting a record 12.3%; the second place city was Portland at 9.2%. Seattle’s housing market also tops the nation in the number of number of bidding wars where 90% of homes have multiple offers with escalation clauses bumping the average single family home price to $722,000.

Not surprisingly the rental rate asking prices in Seattle also topped the nation with an average growth of 5.4%.

With a huge population boom, construction continues to be at an all-time high in the Emerald City. Construction labor cost here is now the third highest in the world behind only Zurich and New York.

Finally, with all of the existing and new intellectuals in Seattle, it is no surprise that Seattle was recently ranked one of the top 10 cities in the U.S. for innovation by the publication Innovation Leader.

TUNNEL/VIADUCT

Now that Bertha has finished digging it is being cut apart and hauled away. There were no other significant tunnel updates in May.

ARENA

Key Arena is currently being considered a national historical landmark, due to its construction during the 1962 world fair. If the Arena is designated then it may entitle the group whom renovates the structure up to $70 million in federal funds. There continues to be debates in the city council on whether to build a new arena in SODO for potential NHL and NBA teams, or renovate the existing Key Arena structure.

OTHER NEWS

In May Geekwire took a look through the Sonos’ engineering office on Capitol Hill. Photos of the space can be found here.

Written by // flinn

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