The Seattle skyline and Mount Rainier. (GeekWire Photo / Kurt Schlosser)
New report: A market analysis for the first quarter of 2021 from the commercial real estate company Broderick Group expresses optimism that after a year of pandemic-induced working from home, organizations and employees will become more confident to return to the office in the Seattle area. The group is foreseeing a rise in demand and space inquiries as COVID-19 vaccination levels continue to rise, even as some companies adopt distributed work models and hybrid workplace protocols.
Key findings: Even as the report references the Puget Sound office market as being among the most resilient in the country, the rebound to pre-pandemic activity will take some time, and 2021 will be a “recovery year” for the market.
Seattle’s direct vacancy rate of 8.11% and sublease vacancy rate of 6.4% makes for a combined overall vacancy of 14.5%, the highest that number has been since 2010.
(Broderick Group Graphic)
The first quarter of 2020 brought 14 significant leases totaling approximately 456,000 square feet, while Q1 of 2021 saw just four significant leases totaling approximately 65,000 square feet.
Eastside growth: East of Seattle, especially in downtown Bellevue, Wash., 2020 was “exceptionally difficult,” the report says. And the first quarter of 2021 was “unquestionably brutal” as the vacancy rate rose to 9.5% driven by a glut of sublease space. But growth from tech giants Amazon, Microsoft, Facebook and Google, a reemergence of tenant activity and the rise of new towers in downtown Bellevue is fueling optimism for the rest of 2021 and beyond.
SpaceX is also growing on the Eastside, leasing a 124,907-square-foot building complex that’s under construction in Redmond Ridge Business Park.
Top market for tech offices: A previous report from CBRE, on the strength of early-2020 activity, found the Seattle region to be the No. 1 …read more