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Seattle Office Leasing Activity Dips, Tech Still Drives Market
The latest report by Savills found office leasing in Seattle dropped for the second consecutive quarter, to 1.9 million square feet in Q4 2019. The firm notes this is down 4.8% compared to the previous quarter and 7.7% year-over-year. Q4 2019 leasing activity was down (18.5%) below the five-year average of 2.3 million square feet per quarter, notes Savills.
Meanwhile, Kidder Mathews’ reports Seattle’s CBD vacancy hit 6.7% at the end of Q4, up 100 basis points from last quarters’ 5.7%, due to “lackluster” leasing activity.
Savills points out six of the 10 largest leases seen in the quarter came from the tech sector, with notable tech giants particularly active. The Downtown submarket captured 52.2% of the large transactions, with tech companies accounting for 69.2% of the quarter’s major transactions.
Kidder Mathews notes, year-end net absorption hit nearly 5.8 million square feet, as tech titans (Amazon, Google, Facebook, Microsoft and Apple) again continued their appetite for close-in office space heading into the new year. Though it points out cranes remain active in both Seattle and Bellevue, with developers pursuing new construction in both of those CBDs, as downtown Class A space becomes increasingly scarce.
Researchers at Kidder Mathews found 11 major construction projects underway totaling roughly 3.8 million square feet, with about half of that space expected to deliver in the next two quarters, though 75% of it is pre-committed.
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