Seattle/Eastside office construction continues despite fickle demand
With 6.59 million square feet of office space currently under construction, Seattle is ranked third in the country for commercial office development, according to CommercialEdge. This will bring a huge number of offices online in a market with rising vacancy and slowing demand.
While there hasn’t been a slew of foreclosures on office property as some experts predicted, the Seattle office sales market has recorded the third-lowest sales among the largest US cities in the past year. The office vacancy rate nationwide was 18.2%, while Seattle hit 22.3% in November, rising 2% year over year, and putting it fourth in the country after Detroit, Houston and San Francisco.
As a tech hub, Seattle is more significantly affected by hybrid work schedules, as well as company decisions to adjust their office footprints and cut costs. The rate of office-using employment dropped about 1% in the past year in the Seattle metro area, based on data from the US Bureau of Labor Statistics and Moody’s Analytics.
On the Eastside, three office building currently under construction will soon house Amazon, Meta and Google. Expected to be delivered in the first quarter of 2024, and the only fully pre-leased major Eastside developments expected this year, the Artise, Kirkland Urban South and the Spring District’s Block 13 will total more than 1 million square feet of new space.
Work-from-home policies in place during and since the Covid-19 pandemic are contributing to rising office vacancy rates. Block 13, which will house Meta Platforms, Inc. expects to offer nearly a quarter of its 1.4 million square feet of leased space for sublease. Kirkland Urban South is set to house Google LLC’s second building on the new Kirkland Urban Campus and did not respond to an inquiry about when employees would move into the building. The third project is the 25-story Artise, a 600,000-square-foot tower fully leased by Amazon.com Inc. As of November, Amazon has not provided an update on when interior work would begin to prep the tower for employees.
SOURCE: GetTheReport.com
