Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of November 2017.
November brought news of Amazon’s newest high-rise, 2205 Seventh Avenue, which is being designed with an “urban treehouse” theme. The site, Block 18, is being designed by Graphite Design Group and will have 388,000 square feet of office space and 8,800 square feet of retail. The top floor deck will be available to all tenants, and the building will also have collaborative gathering areas called “birds’ nests.” More pictures can be found here.
Also, Life sciences developer BioMed Realty showed off their new plans for 700 Dexter, a new life science campus in South Lake Union. The 500,000 square feet of office space is being designed by SkB Architects, and will be split between two 14-story buildings, each one connected by a double-decker sky bridge.
There were no reports of office building sales in Seattle in the month of November 2017.
Uber may reign supreme in Seattle, but the competition is starting to heat up. Lyft signed a lease for 19,616 square feet at the 83 King building, adding to the 19,000 square feet they already occupy in the National Building. The ride-hailing company is currently hiring for a variety of positons in Seattle, and now has the room to add 200 more non-driver employees to its current 110. Lyft’s sales are growing faster than Uber’s, but despite this headway Uber still leads the market.
Spaces, a subdivision of the co-working company Regus, opened their first Seattle office with 60,000 square feet at 450 Alaskan Way in Seattle’s Pioneer Square submarket. The ever-growing number of co-working companies flocking to Seattle has experts predicting the total co-working square footage to double to over 1.3 million square feet in the near future.
Meanwhile, Nordstrom continues to offer more and more space up for sublease. The retailer has recently put 177,000 more square feet on the market at Russell Investments Center, which is located about five blocks from the Nordstrom flagship store. Nordstrom now has over 300,000 square feet available for sublease at Russell, some of which has already been subleased by Oracle and Indeed. Nordstrom insists that the release of space has nothing to do with financial troubles, and instead stems from a desire for consolidation of personnel. Regardless, Nordstrom is giving up more than a fifth of their downtown Seattle office space.
People often talk about how Amazon’s growth has affected rents in Seattle, but a new report from Zillow has officially quantified the tech giant’s impact. Seattle rents have increased by an average of $0.11 per square foot per year since 2011. And about $0.07 of that increase is due to what Zillow calls the “South Lake Union jobs boom.” New jobs means more people, and more people drives up demand – and rent. Zillow discovered a relationship between the number of SLU employees in a neighborhood, and larger rent increases.
In a new quarterly report from HSH.com, the study found that the average prospective buyer needs an $11,000 pay raise just to afford a typical mortgage. Households need an income of $93,400 per year to afford monthly house payments in the Seattle metro area, up from $82,000 only a year ago. Down payments are also increasing, putting pressure on some to buy now before costs get too high, or simply pricing people out of the market entirely.
Downtown Seattle’s skyline may be looking increasingly crowded these days, but developers continue to erect apartment towers despite the squeeze. Skanska recently paid $21.6 million for a property in Belltown, which will eventually become a 346-unit apartment tower. Multi-family housing keeps popping up, but the demand is still outpacing supply. Seattle continues to add jobs, and the record appetite for office space in the city sends a clear message: people working in Seattle need to live somewhere. Skanska’s Executive Vice President, Murphy McCullough, says that even though it’s hard to believe, the market still isn’t building enough apartment buildings.
Many of Amazon’s office leases are coming to a close in 2019, but John Schoettler, vice president of global real estate, insists that many will be renewed. Amazon’s future space needs are up in the air, but for the foreseeable future, Amazon will be a major leasing tenant in Seattle and also Bellevue.
All these rapid changes in the market have resulted in some mental turmoil in the Seattle area. A recent poll regarding the direction of Seattle’s growth reflects a mixed opinion – pessimistic in some regards, optimistic in others. 70% of people believe that the region’s growth benefits only a few, but 69% also believe that the Puget Sound region is moving in a positive direction. Just over half of those asked think that the region is becoming “world class,” but only 38% believe that their quality of life has gotten better.
The Seattle City Council is just about ready to approve Oak View Group’s bid to renovate KeyArena. The vote will be on December 4th, right after a memorandum of understanding (MOU) with Chris Hansen expires. If the vote passes, the City will sign a 3-year MOU with Oak View Group. The project’s overseer, Lance Lopes, revealed some details of the timeline and goals of the arena renovation, including budget, parking concerns, and whether or not the NBA will decide to move back to Seattle.
The new Highway 99 tunnel is over a year away from completion, but the lower deck is now being built out. 1,152 concrete panels will form the lower deck, a different construction than the tunnel walls and upper deck, which were cast in place.
A Geekwire article has taken an even deeper look into the future home of Highway 99, riding through the tunnel before its completion. For more pictures and a narrative exploration, read on here.
Our shifting work landscape continues to move away from the linear efficiency-focused model of past decades, and towards a creative, flexible model that encourages expression, fluidity and innovation. The office environment can be set up in a way that fosters creativity and empowers employees, 87% of which seek creative, forward-facing companies (according to a 2016 Gallup poll).
Wood-products company Weyerhaeuser has won NAIOP’s “Office Interior of the Year” award for its innovative, re-purposed headquarters in Pioneer Square. Images of Weyerhaeuser’s space and the other finalists can be found here.
Finally, Launch Pads takes a look inside Hulu’s dynamic tech space at Fourth & Pike, which runs 24-hours per day to monitor Hulu’s growing host of apps. A closer look at Hulu’s office can be found here.