Seattle-Bellevue office market
The office-vacancy rate in the greater Seattle market has plummeted
from levels approaching 18 percent in 2009, in the wake of the Great
Recession, to 10. 3 percent as of second-quarter 2018, according to data
from commercial real estate services company JLL. Average asking
rents, by comparison, have moved in the opposite direction, increasing
from a post-recession low of $26.94 per square foot in 2011 to $41.46 per
square foot as of this past second quarter — which is more than $10 per
square foot higher than in 2007, just prior to the recession.
JLL projects demand for office space in the greater Seattle market to
remain strong through the balance of the year. That demand is expected
to propel additional office development as well. Some 5 million square
feet of office space could potentially come online over the next two years,
which will position the greater Seattle market for continued growth,
What the locals say
“I’m feeling confident that it’s going to be a solid market
[in the Seattle area] in the year ahead. There are hints out there
of caution, but not from signals of lack of customers that want
to come and buy or rent space and use it. It’s more from [the
fear of the unknown, that] we’re so far into this boom that’s
outside of the traditional real estate cycle, so what’s going to
happen next? Going into the new year, I don’t see a slowdown.
I’m seeing that the economy is going. We don’t have a lot of
product to put new people into. So, if anything is going to be
slow, that’s it. I’m confident, however, that the next 12 months
will be a good 12 months in real estate in Seattle.”
By Bill Conroy
The Evergreen State is the land of innovation.
Washington, also known as the Evergreen State, has long been known for
innovation and as a launching pad for some of today’s leading companies
across multiple industry sectors, including tech giants Microsoft and
Amazon.com; retail powerhouses Nordstrom, Starbucks and Costco; and
aerospace manufacturer The Boeing Co.
The state’s business dynamism is reflected in its economic growth. In 2017,
Washington’s gross domestic product (GDP) grew at a sizzling 4. 4 percent
pace, according to U.S. Department of Commerce figures. The national
GDP growth rate last year was 2.1 percent. In fact, between 2007 and 2017,
Washington notched a compound annual GDP growth rate of 2.1 percent,
nearly double the 1.2 percent mark nationally over the same period.
Several leading publications have lauded Washington’s economic and
business performance. Earlier this year, CNBC dubbed Washington as its
“Top State for Business” in 2017 and Business Insider ranked the state’s
economy No. 2 among all states and the District of Columbia based on six
measures of labor-market and general economic vibrancy.
The state of Washington is a draw for global investment. Some 870 international companies employ more than 112,000 people in the state, with nearly
a third of those jobs in the manufacturing sector, according to the Organization for International Investment. Washington also is a popular destination
for the nation’s immigrants, and now boasts the 10th-largest immigrant population in the nation, with immigrant-owned companies employing about
142,000 people, according to the Partnership for a New American Economy.
Close to 40 percent of Washington’s economy is driven by three major
sectors: technology, manufacturing/aerospace and agriculture, according to
industry-association and government sources. The state boasts the largest
number of aerospace workers, with Boeing, the world’s largest aerospace
company, leading the charge.
Washington is home to some 375,000 technology jobs, according to the office
of U.S. Sen. Maria Cantwell, D-Washington. Washington ranks among the top
10 states for high-tech jobs, Sen. Cantwell’s office said, with Seattle laying claim
to being the fifth-most innovative city in the nation, according to Forbes.
The Evergreen State’s agricultural industry is worth an estimated $40 billion
and employs 160,000 people, according to Sen. Cantwell’s office. Washington produces 70 percent of the nation’s apples and also is major producer
of milk, potatoes, cattle and wheat, according to the Washington Department of Agriculture.
Other big drivers of Washington’s economy include the tourism and maritime
industries. The state also is home to a budding legal cannabis industry. n
Washington State Commercial Association of Realtors
Seattle-Bellevue Office Market
*As of second-quarter 2018
Average asking rent
per square foot
Total vacancy rate