Seattle Commercial Real Estate News of the Day

Thursday, September 29, 2011

Seattle Times Daily Journal of Commerce Headline
Survey: CEOs of big companies foresee less hiring Real Estate Buzz: Is Expedia adding space in Skyline Tower?
GDP revised upward, but economy still weak Talk among office brokers is that Expedia will take more space at Skyline Tower, the 24-story building near its downtown Bellevue headquarters.

Earlier this year Expedia leased three floors — or 54,500 square feet — in Skyline, which is at 10900 N.E. Fourth St. That and an expansion by the computer gaming company Valve brought the building to 85 percent leased.

The latest rumors have Expedia taking another floor or two.

Broker Steve Schwartz of Pacific Real Estate Partners, who represents landlord Beacon Capital Partners with JJ Shephard and Sarah Frazee, declined to comment. Expedia runs with Commerce Real Estate Solutions/Cushman & Wakefield’s Michael Dash and Jeff Jochums, who also wouldn’t comment.

If Expedia takes two floors that would bring Skyline to about 90 percent occupied, according to information on officespace.com. The question is whether that would prompt Beacon to put the property up for sale. This summer, Beacon sold the nearby Key Center to Kilroy Realty for $215 million. It was 88 percent leased at the time.

Colliers: Amazon wants more

Seattle’s office market saw the strongest quarterly net-absorption in nearly three years, so expect landlords of new Class A properties to trim leasing incentives and hike rents.

That’s the word in Marcus & Millichap’s third quarter report, which states the region’s market is “strongly positioned to continue its transition to recovery.”

Of course the driver in Seattle is Amazon.com. Colliers International reports the company moved into 816,000 square feet this year and will move into another 326,000 square feet next. But wait, there’s more. Amazon is also rumored to be looking for an additional 300,000 square feet in the near future, according to Collier’s new quarterly report.

All this leasing activity means it’s hard to find big spaces. Colliers says tenants seeking 200,000 square feet or more in Seattle have just two options. On the Eastside, larger tenants continue to look elsewhere because that market now has only six available spaces of 100,000 square feet and above.

Going forward, Marcus & Millichap thinks the region’s vacancy rate will decrease 90 basis points to 15.1 percent this year, and that landlords will raise asking rents a bit more than 1 percent to $28.30 a square foot. But don’t get too excited just yet. The report states: “Considerable time will be required to restore Puget Sound’s pre-recession vacancy rate of 8.9 percent.”

R2D2 Building going on the block?

There’s another rumor that Tishman Speyer plans to sell Safeco Center at Second and Seneca in downtown Seattle. Tishman’s Seattle office referred questions to Carl Shannon in San Francisco, and he was not immediately available.

A year ago, the company said it had reached an agreement to restructure the debt secured by the building, which has a dome on top and used to be named Second and Seneca. The deal called for the owners to invest new capital, which the company said will put the property on firm financial footing into 2017 when the current debt matures. Bloomberg News reported that Tishman invested $15 million of new equity.

Tishman bought the building at the height of the market in 2007. While the company refused to say what it paid, local sources pegged it at between $230 million and $234 million. King County assesses the 22-story building at about $103 million.

Around 62,000 square feet are available for lease, according to a flier from the Broderick Group, which markets the 434,400-square-foot property.

The dome has earned the building two nicknames: the Ban Roll-on Building and the R2D2 Building. The latter, we think, is especially descriptive.

How’s the hunt for that needle going?

During the first eight months of the year, Talon Private Capital studied around 80 investment opportunities. Out of those, the principals decided only three were worth pursuing: Two in Seattle and one is Portland.

“We should know in three to four weeks if we are going to get through due diligence and close,” said Bill Pollard, a founder of the Kirkland company that invests capital for high net-worth families.

Talon’s experience shows how bifurcated the market is. There are lots of inferior properties available, some premium properties, “and not much in between,” said Pollard. Finding desirable properties is akin to uncovering a needle in a haystack.

“There’s very little real estate out there that has the quality and location that we and others want to own.”

7,100 call downtown Bellevue home

Do the faces of people on the streets of downtown Bellevue look a lot younger these days? Well, it’s not just your imagination.

Over the last 10 years, more than 5,300 housing units were added to the central business district, and during the same period the median age of downtown residents went from 57 to 34. Eleven percent of the people who live downtown are between 18 and 34. Over about the last decade, the number of people under age 18 more than tripled to 544.

The Bellevue Downtown Association released the data at a Tuesday breakfast program. The information is based on census data, estimates from the city and other sources.

BDA officials want to measure whether they’re meeting their goals of promoting retail, attracting knowledge workers and innovative companies, and encouraging more housing. Go down the list and it’s check, check and check.

Patrick Bannon, the association’s VP of communications and public affairs, said the graphs are a work in progress, but here’s what the early versions show has happened over the last five years:

• The number of people who live downtown is up 47 percent to about 7,100. Between 2000 and 2010, the city’s overall population increased about 10 percent, while downtown’s jumped nearly 180 percent.

• Downtown employment shot up 30 percent to around 42,500.

• Taxable retail sales last year were around $1.75 billion. That’s down from about $2 billion before the economy crashed, but 31 percent higher than in 2005.

Hellickson drops fight over losing real-estate license
Puget Sound Business Journal
Tech industry driving demand for Seattle office space, jobs
Judge sides with trustee on Mastro rings, property
Top Seattle-area tech innovator is a surprise
Seattle-PI.com
Residents continue debate over light-rail
Seattle’s rental market tightens as developers build
Rate on 30-year mortgage falls to record 4.01 pct.
Other News
Pending U.S. Home Sales Decline 1.2% as Lower Prices Fail to Stoke Demand
Stocks jump after unemployment applications plunge
Economy Gaining but Not Enough to Cut Unemployment
USDA Announces $80M for Washington-Led Research
Site Posts Data on Real Estate Agent Success
Unemployment Rates for Cities in the West
Advertisements

About CRE Northwest

Specialist in office & investment real estate in Seattle & the Eastside
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s