Compliments of Jason Smith of Kidder Mathews, attached is a Seattle-area office real estate market review for Q3 2012. As the report notes, compared with the first half of the year the Seattle office market was very quiet in Q3, with the main difference between Q3 and Q2 that there were no new Amazon lease commencements. Not to say Amazon is the only driver in the local office market recovery, but it does point out just how big a role they have played, accounting for about half of the total net absorption in the past three years.
Bellevue stands out among the submarkets in its recovery due to a wider array of significant participants, which has led to the vacancy falling to nearly 9% in the central business districts and prompting developers to jockey for position to start the next tower. The rest of the region showed little leasing activity over the quarter, and the availability rate moved up by 29 basis points, stubborn at over 14% for nearly two years.
In general, confidence in the regional economy continues to improve, even as the national outlook is jittery. Employment growth has been better than forecast and the prognosis for 2013 has been upgraded in each of the last five quarterly Puget Sound Economic Forecaster reports. Eventually this will convert to new office space demand, although most traditional office-centric companies are yet to participate in the recovery as strongly as the internet and entertainment sectors.