WINTER NEWSLETTER Sifting Through Seattle's Market Statistics |
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"What is that?" I asked my 6 year old, who proudly showed me a picture that he drew at the Microsoft store. I immediately noticed how much it resembled both a Martin Selig painting, and the market data shared with the Seattle business community. -DH |
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Things are still pointing towards a “landlord’s market” in downtown Seattle, but at least there are a few indicators that show hope for tenants. Two kinds of inventory are trending in the right direction: sublease space inventory has increased for 3 quarters in a row, and new construction is coming online. |
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Sublease Space Inventory You can tell rents are high when you see tenants turning toward less expensive sublease opportunities. As a percentage of total leasing activity, 21% of downtown Seattle’s activity in the 4th quarter was sublease transactions. This is triple the amount of activity when compared to the 2nd quarter of 2016. |
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New Construction Inventory New construction projects are adding nearly 2 million square feet of space over the next 12 months, of which 75% is still available for lease. This will help relieve some of the pressure on inventory. This inventory will buoy rental rates for Class A product in the $40’s per square foot per year (gross). |
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Rental rates have remained flat for the last 2 quarters, which corresponds with the little bit of slowdown in recent quarters of leasing activity, the anticipation of new construction, and the uncertainty surrounding the Donald. As exclusive tenant representatives, Union Street Corporate Real Estate is keeping the hope for a turn toward a friendlier tenant market in 2017. |
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