Seattle Commercial Real Estate News of the Day

Monday, October 03, 2011

Seattle Times Daily Journal of Commerce Headline
Seattle’s Kress Building, future J.C. Penney site, is sold Brokers say Amazon still looking for space
Shared work space gaining popularity still needs more office space and is looking at existing buildings and new ones beyond those in its headquarters, according to Colliers International.

Amazon is the main driver in the Seattle office market. It moved into 816,000 square feet of new space so far this year, and will take 326,000 square feet of new space in 2012. The company also is expected to lease the remaining space in the new high-rise West 8th.

Now there are rumblings the company will take even more space, with speculation that it will move into some existing buildings and hire a developer to build more offices.

The world’s largest online retailer is on a tear. It dominated last week’s business news with the unveiling of its tablet computer, Kindle Fire.

Worldwide, Amazon grew by about 9,400 employees in 2010, and now has more than 33,700 workers. It has about 2,000 job openings in Seattle posted on its website. That’s a good indication the company will need more space.

“It’s common knowledge in the brokerage world that Amazon appears very close to signing a lease at West 8th,” said Colliers’ broker Greg Inglin, who does not work with Amazon. “I would expect that to happen in the next couple of weeks, if not the next week.”

Inglin and others say that deal will fill the remaining 320,000 square feet in that tower, which is near Amazon’s new headquarters.

Officials from Touchstone, which developed West 8th, and its leasing agent, Stuart Williams of Pacific Real Estate Partners, declined to comment. Amazon officials did not return calls.

There’s talk Amazon is eyeing space in the 1260 Mercer and 617 Eastlake buildings, which are owned by Seattle-based Blume Co. Those buildings total 201,000 square feet, though some of the space is leased, said Jesse Ottele, the CB Richard Ellis broker who markets the space.

He declined to comment on whether Amazon is looking at the buildings, but said the leasing team is seeing “tremendous activity on both.” Bruce Blume did not return a call.

Brokers say the company also is looking at additional new space. Vulcan, which developed Amazon’s nearly completed headquarters, would be a logical choice. Touchstone, which has been acquiring development sites in the area, is another, Inglin said.

Lori Mason Curran, Vulcan Real Estate’s investment strategy director, said her company’s focus is completing the fifth phase of its 1.7-million-square-foot headquarters. “Amazon is a fantastic partner and client, and we would welcome the opportunity to work with them in the future.”

A new report from Colliers shows Seattle’s office market continued to stabilize during the third quarter.

Colliers reported the overall office vacancy rate in downtown Seattle is 16.5 percent, or 160 basis points less than a year ago. In the Lake Union submarket, the vacancy rate is 19 percent, though that’s misleading.

“That is definitely coming down,” said Inglin. He said while some buildings in the Lake Union area are largely vacant, they’re expected to be filled soon by Amazon and others. “That particular submarket, which is the hottest submarket in Seattle, could quickly tighten up.”

CB Richard Ellis pegs the Lake Union vacancy rate at 11.3 percent and downtown Seattle’s overall rate at 17.9 percent.

Construction spending up but pace is still weak
Puget Sound Business Journal
Kress Building sold, JC Penney in the wings
Starbucks starts $5M small business loan program
Frazier Healthcare in deal to acquire 30 dialysis clinics
Economy up slightly but threats remain, data show
Construction spending up but pace is still weak
WCC Considers Stone Way Building Proposal
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Barclays, BofA Mull Sale of Archstone Stakes-Source
Russell eyes the summit

About CRE Northwest

Specialist in office & investment real estate in Seattle & the Eastside
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