A Landlord's Market, But...
Those last, lingering doubts that Seattle’s office market still doesn’t have its mojo back can be put to rest: as of the end of Q3, vacancy dropped so low (11.1%) that the city has the fourth-lowest rate in the country, JLL VP Joe Gowan tells us. Only NYC, Portland, and San Francisco can boast a lower rate. The market's tilting toward landlords, Joe says, but that doesn’t mean any landlord with availability can assume it’s still in the game. Tenant needs are changing—especially in a tech-heavy, Millennial workforce market like Seattle—so landlords can’t assume anything. Many major buildings have been revamped—or soon will be—to provide amenities tenants are demanding.
Also, Joe says, large blocks of space are in short supply in the Downtown core of Seattle, with just one block of 100k SF currently being marketed, while the market saw four leases over 100k SF done in Q3. By contrast, the Bellevue CBD has seen little new absorption lately because there simply isn’t enough supply on the market, JLL managing director Charlie Malley tells us. New space will eventually come in the form of 929 Office Tower and Lincoln Square II, but for now there’s pent-up demand, with vacancies dropping and rents rising. Overall Eastside vacancy has dropped to 8.9% as of Q3, down from 10.9% at the end of Q1 this year.
