Economy, Market View and Outlook for Third Quarter 2018
SEATTLE, WA — October 30, 2018 In the Seattle-Tacoma-Bellevue Metropolitan Statistical Area, the unemployment rate dropped 30 basis points (bps) year-over-year to 3.9%. Nearly 70,000 new jobs were added, with the tech industry remaining vital to employment. Cushman & Wakefield’s Tech Cities 2.0 report, published at the end of the quarter, listed the region as one of the “Tech 25” – key U.S. and Canadian markets where tech accounts for a significant portion of the local economy.
According to Cushman & Wakefield Senior Research Analyst, Brian Cagayat, the Seattle Suburban office market reported an overall vacancy rate of 17.5% and an overall gross asking rental rate of $27.08 per square foot (psf) in the third quarter of 2018. Vacancy rose 450 bps year-over-year, while rent rose $1.05. Net absorption was reported at over 67,000 square feet (sf). Leasing activity was 254,000 sf, upping the year-to-date total to 638,000 sf. In the largest new lease, an undisclosed tenant took nearly 39,000 sf at SeaTac Office Center in the SeaTac submarket. In the largest sale transaction, The Benaroya Company sold 6100 4 th Ave S, in the South Seattle Close-in submarket, to Trupanion for $64.9 million ($283 psf). The 229,000-sf Class A office building was fully leased at the time of sale (approximately 40% to Trupanion) and sold at a 6.0% cap rate.
Cagayat’s market overview reports the urban core is still seeing low supply and high rents, and Puget Sound-area firms continue to consider the suburban market for their real estate needs. The Southend reported a decrease in vacancy between quarters, while both Seattle In-City and Federal Way saw slight increases. Rent increased in all of the suburban submarkets except SeaTac, Kent/Auburn, and North Seattle/Northgate. Over one msf was under construction at the end of the quarter. Southport, a three-building, 688,000-sf office campus in the Renton submarket, is set to deliver vacant at the end of the year. Seattle In-City has 360,000 sf under construction, the most notable being 15th & Market, a 200,000-sf project in the North Seattle/Northgate submarket that will deliver in 2019.
Review the entire report here http://www.cushmanwakefield.com/en/research-and-insight/unitedstates/seattle-office-snapshot/
Find out why Seattle remains vital to the tech industry in Cushman & Wakefield’s Tech Cities 2.0 video update from Robert Sammons on Seattle. https://bit.ly/2qjkCqE
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Senior Research Analyst
Cushman & Wakefield
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