Seattle Office Rents Are Fastest Rising in the Nation
As Mike Rosenberg of Seattle Times reports, “it’s not just housing prices: Seattle is not the bargain it used to be for companies, either.” Though the Emerald City was historically a bargain compared to other larger cities, “the city’s recent boom driven by Amazon and other tech companies has propelled Seattle up the ranks of the nation’s most expensive places to rent an office, passing Chicago and Los Angeles just in the last three years.” During the three year period, Seattle office rents increased a staggering 31 percent, “about 2 ½ times faster than the national average.”
Despite increasing rents, office vacancy is down, just under 6 percent, as “Seattle now has a smaller share of offices sitting empty than San Francisco or Manhattan, the two most expensive commercial real-estate markets in the country.” Given the lack of available spaces available, commercial real-estate landlords have been able to raise rents, and the new office construction over the past few years “hasn’t been enough to stave off the rent increases for office space.”
Amazon on its own is taking up a lot of real estate in the city, as the company “already occupies far more Class A office space in Seattle than any company has in any other big U.S. city” and as of last summer, had taken over 8.1 million square feet, a figure which will surge to 12 million as additional projects are completed. “Overall, tech companies now make up about 75 percent of leasing in Central Seattle.”
Looking to cost, “average annual rents citywide have surged past $40 per square foot for the first time, surpassing Chicago (about $38) and Los Angeles ($39),” and though the figures are impressive, they are “still well behind San Francisco ($70) and Manhattan ($72).”
Read the full article on Seattle Times here >>