Compliments of Jason Smith of Kidder Mathews, attached is a Seattle-area office real estate market review for Q1 2014. As the report notes, the first quarter of 2014 marks the beginning of the fifth year of the office market recovery from the great recession that crash landed in 2009. Occupancy continues to inch upward; steadily in downtown Seattle and downtown Bellevue, less consistently in the secondary markets. Job growth has not recovered outside of the core markets and with office space tending to follow employment growth, slow and calculated absorption on a regional basis is what Jason’s firm is forecasting.
With regards to Company-specific news, Boeing announced their intention to lease as much as 200,000 square feet along the I-90 Corridor and has signed leases for about 450,000 square feet in Bothell. Both of these submarkets had seen very little demand over the past five years. However, the strong performance of the core submarkets has been enough to keep Seattle in the top ten office investment markets on a national basis. Construction activity increased through the year with eight major projects started; seven in downtown Seattle and one in Kirkland. Four of the Seattle projects are speculative; Amazon.com will occupy the other three and Google will fill the Kirkland project.
The full Q1 2014 market review can be found here.