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Thursday, January 31, 2013

Pioneer Square Update

Pioneer Square has always been interesting to me as a Tenant Rep broker for many reasons including 1) the types of businesses it tends to attract 2) the unique architecture and character 3) proximity to public transportation 4) the mix of people who spend time there 5)the oscillating interest and fleeting appeal.  This is a great neighborhood where people call home, work, play and entertain.   There are some not so appealing traits where there are homeless people, shelters and some petty street crime.  Throw in some art galleries, restaurants, music and you end up with a unique gem of a neighborhood with a full spectrum of individuals and interests.
Statistically, the office vacancy rates have been improving and rental rates have been increasing slightly as well. Q4 2012 vacancy rate here was 14.08%. Compare that to Q3 2012 vacancy rate of 15.81%. That is a big shift for such a short time. Specifically that is 122,140 SF of net-new space being occupied between Q3 and Q4 2012.  For some contrast, let's look at the progression for the past few years Consider Q4 2010 to Q4 2011 to Q4 2012 respectively: 22.29% --> 17.30% --> 14.08%.  8.21% absorbed in 3 years, whoa! That is 578K SF of space. Compare that to the entire building of 1111 3rd Ave...ok not many people are likely familiar with that building.  The iconic Smith Tower is 256K SF, so the absorption in the past three years is equivalent to more than double the size of the Smith Tower.
Pioneer Square's appeal has been on the rise and it seems that creative firms and technology firms are the primary change drivers. Consider two new leases announced: Intel is taking 50,000 SF and Avvo is taking 25,000 SF at 705 Union Station.  Or how about Globys (who recently moved into their new office) taking down 24,000 SF.  Let's go back a few more months Double-Down Interactive decided to double there office size (http://www.bizjournals.com/seattle/blog/techflash/2012/08/double-down-interactive-doubling.html?page=all).  It is also worth mentioning some significant sized offices that have relocated to Pioneer Square from other submarkets most notably Getty Images, Attachmate, HTC, and Zynga.  But let us not forget some big names that have already been there for years: ING, EMC / Isilon, Disney, and Olson Kundig Architects, Vulcan, Watchguard Technologies....the list can continue for awhile but you get the idea.
So I thought it would be interesting, what if I created a map with all the tech companies in Pioneer Square. What would it look like?  So I did. I have some final touches and will be posting this soon.

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