New South Lake Union Building Size Limits

The Seattle City Council today approved zoning in the South Lake Union neighborhood which would allow for office buildings as tall as 240 feet with floor plates as large at 24,000 SF.  So how many stories is that? A good number to use is 14 ft per story.  Based on those figures, a new building may be as tall as 17 stories and 408,000 SF.
For size/ height comparison purposes, you may want to take a look at Metropolitan Park East, which is located at 1730 Minor Ave. Seattle, WA 98101.  Costar shows Met Park East is a 20 story building at 363,725 SF. Here are a couple of images:

For more details on the new zoning, please take a look at the announcement from the Seattle City Council News Release or at Mayor Mike McGinn's Blog.

Tenant Improvement Allowance

When negotiating tenant improvement allowances, be sure to include language that provides flexibility on your timing of spending them. Great blog post from Andrew Weiner. For the full post, click on this link: Tenant Improvement Allowance -- It

First Quarter 2013 Office Market Report

Q1 2013 Office Market Report

After experiencing some strong absorption and investment sales activity toward the end of 2012, the Puget Sound office market experienced a much slower first quarter of 2013. Rental rates continued to inch up slightly, while absorption was relatively flat. For a more comprehensive market report, please feel free to ping me so I can send it to you. Here are some highlights: 

Vacancy Rates:

	Vacancy Rates
	Seattle	Eastside
Class A	13.39%	8.44%
Class B	10.20%	10.28%
Average	11.86%	9.22%

Rental Rates:

	Rental Rates / SF / Year
	Seattle	Eastside
Class A	$31.55	$34.66
Class B	$26.93	$26.04

Significant Leases:

Tenant	Address	City	Size
City University	521 Wall St	Seattle	87,575 SF
eBay	411 108th Ave NE	Bellevue	45,551 SF
Areva	10735 Willows Rd	Redmond	22,489 SF
Attachmate	705 5th Ave S	Seattle	75,244 SF

Significant Building Sales Q1 2013:

Property Name	Seller	Buyer	Square Feet	Sale Price	Price per SF
Pacific Building	Merriwether Partners	Rockpoint Group	129,026	$35,500,000	$275/SF
Westlake Terry	Vulcan Real Estate JV Group Health	Kilroy Realty	320,339	$169,966,667	$530/SF
605 Union Station	McCaw Group	LACERA	333,500	$96,900,000	$291/SF
19803 N Creek Pkway	Schnitzer	Rosen Props	157,000	$25,800,000	$164/SF
19515 N Creek Pkway	Schnitzer	Redstone Holdings	77,595	$14,830,000	$191/SF
Dexter Horton Building	LaSalle OBO Prudential Financial	Gerding Edlen	336,000	$76,634,461	$228/SF

The greenest building in the world has officially opened

For those companies out there wishing to work from a building that is as self-sustaining as possible with a minimal carbon footprint, look no further. The most suitable building in the world for this is located in the one of the most densely populated neighborhoods of Seattle. The grand opening was today, on Earth Day. Our firm represented the two latest tenants who recently signed leases at this building. Hopefully negotiating 'green leases' on behalf of a tenants becomes more common place as building developers work at becoming more eco-friendly. Kudos to the Bullit Foundation for their thought leadership and actions which will hopefully pave the way for future green developments. For more information on the building please click here: http://bullittcenter.org/ There is a great article written in the New York times about this. Check it out: http://www.nytimes.com/2013/04/03/realestate/commercial/the-bullitt-center-in-seattle-goes-well-beyond-green.html?smid=pl-share

Interesting New Building at 2nd & PIke

When you compare the two to three block radius of buildings around this proposed building, you’ll find about 24 Class A and B buildings of which could technically compete for tenants.  However, the proposed plan includes tall ceilings that many tenants these days find very attractive, yet in short supply.  This should make this building stand out from its competitors and be very appealing from a tenant’s perspective.   

Frequently, my client’s criteria include having multiple amenities nearby by for the employee’s as well as places for both formal and informal meetings.  Beyond the obvious reasons for these amenities are strategic plans to achieve more productivity out of their employee’s, attract new talent and retain the existing talent. 

Instead of going home at a 5pm, why not meet your co-worker for a meal or beverage to discuss the latest project? Or if you are a software programmer, maybe you prefer to start work at noon and leave at midnight. On your break you may want some entertainment or even walk to your condo down the street or in one of the 50 residential units in the building. 

From an office user perspective, I can see this being a home-run.  I’ll be curious to see how the mix of both residential, office and retail plays out.  It is a concept that has worked well in other markets, however this is uncommon for Seattle. Given the location, the odds are favor of this working quite well.

Click Here to review the DJC article

Smith Tower Comeback from King 5 News

So I made it on the news! Great story on Smith Tower's come back, here is a link to the video:

Coming up on its 100th anniversary, the Smith Tower is getting new life. In foreclosure and nearly vacant a year ago, it's now nearly two-thirds full.

"It really is coming back to life. Many people familiar with Smith Tower history know it's had its ups and downs," said Smith Tower marketer, Cate Chase.

Ups and downs are a draw at the tower, with historic elevators still manned by uniformed operators. And the old mail drop is still in use.

The second floor office, which had been empty for five years, will be the new home of Pacific Telecom.

Taking over the 4th and 5th floors last month is Projectline, a marketing and social media firm. The CEO picked Smith Tower over high-tech hub, South Lake Union.

"It's got character. It's an impressive space and everybody appreciates the look, style and feel," said Projectline CEO Mike Kichline.

The geek boom is spreading from the tower through Pioneer Square.

With lower rents than South Lake Union, there is a tech renaissance in Pioneer Square.

Commercial realtor Bryan Rush with Colliers International developed a tech map of Pioneer Square, showing dozens of start-ups dotting the historic area.

"Architectural firms, digital marketing firms, media firms. Not necessarily tech, but they are creative," said Rush.

Pioneer Square now has a 14 percent vacancy rate compared to a 5 percent vacancy rate in South Lake Union.

Seattle Skyline Review

Here is an interesting profile looking at which floors have vacancies in some notable Seattle Class A CBD  high-rise buildings:

These buildings make up some of the most expensive downtown office spaces available in Seattle's CBD. Every quarter, our research department at Colliers puts this report together and what is consistently interesting is that floors toward to the top of the building tend to stay occupied. Keep mind that the top floors are much more expensive than the lower floors. Even during the 'great recession', these top high-rise spaces continued to stay in high-demand.
The two largest chunks of vacant spaces can be found at the Columbia Center and 1111 3rd Ave. The majority Columbia Center's vacancy is left over space from Amazon.com's recent departure to their current HQ in South Lake Union.  1111 3rd is still reeling from from both Washington Mutual's collapse and then the relatively new ownership going into receivership.
There are quite a few stories here. Some items of note that I may write more about when time permits: The northern CBD buildings tend to perform better than the southern CBD buildings. The 'newer' buildings in this group filled up quicker than the 'older' buildings between 2008 to present.  The buying & selling, combined with the timing of the recession impacted the flexibility of some of these landlords.  Some of these buildings will continue to have a tough time for the foreseeable future despite our improving economy.  'Technology' tenants are some of the largest tenants in these high performing newer, expensive buildings.....you get the idea. But for now, I must post and continue with my day. If you'd ever like to discuss these buildings specifically, or just listen to commercial real estate stories of Seattle please don't hesitate to contact me.