J.A.C.
September 29th, 2004, 09:37 PM
from www.seattletimes.com
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view of the downtown Bellevue skyline looking east. The office-vacancy rate downtown approached 30 percent two years ago; it's now 10.8 percent.
Big deals gobble up Bellevue office space
By J. Martin McOmber
Seattle Times business reporter
MIKE SIEGEL / THE SEATTLE TIMES
A view of the downtown Bellevue skyline looking east. The office-vacancy rate downtown approached 30 percent two years ago; it's now 10.8 percent.
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Downtown Bellevue's office-vacancy rate plunged nearly 8 percentage points in the past three months, capping a dramatic turnaround for a city that recently ranked among the hardest hit commercial real-estate markets in the country.
The amount of available office space fell to 10.8 percent in September from 18.6 in July, according to a survey released yesterday by brokerage firm Cushman & Wakefield. The rate is the lowest since early 2001, when the region's collapsing high-tech economy began to abandon large chunks of space in Bellevue office towers.
The drop was no surprise.
Real-estate experts had been expecting a dramatic change after Safeco spinoff Symetra Financial and online retailer drugstore.com decided to move their headquarters to downtown Bellevue.
But the new number underscores just how fast the suburban city's fortunes have changed. Two years ago, the downtown vacancy rate neared a record 30 percent, a hole so deep many believed it would take the better part of a decade to climb out.
Today, developers including Kemper Freeman, Schnitzer Northwest and Equity Office Properties are once again maneuvering to add office towers to the skyline.
"The real nice places have all been leased up," said Tom Bohman, director of Cushman & Wakefield's Bellevue office. "What's left are the smaller places that are harder to lease."
Bohman predicts Bellevue's vacancy rate will continue to fall, but at a more modest pace. And he expects it will still take several years for average annual rental rates — which inched down from $23.23 in July to $22.99 a square foot in September — to increase enough to cover the costs of a new building.
If landlords in Bellevue are looking toward better days, they have Equity Office to thank. The Chicago-based real-estate investment trust and the region's largest owner of office space, lured Symetra and drugstore.com to office towers with attractive leases that consumed about 340,000 square feet of space.
Although both companies are moving from other Eastside locations — Symetra from Safeco's Redmond campus and drugstore.com from Sunset Corporate Campus near Interstate 90 — brokers expect those spaces to lease quickly.
Bellevue's improving office market also earned the city bragging rights for topping Seattle. For the first time in years, the suburban downtown has a lower vacancy rate than its urban counterpart.
Seattle's office-vacancy rate remained virtually flat for the past three months, falling one-tenth of a percentage point to 15.1 percent.
http://seattletimes.nwsource.com/ABPub/2004/09/28/2002049044.jpg
http://seattletimes.nwsource.com/ABPub/2004/09/28/2002048830.jpg
view of the downtown Bellevue skyline looking east. The office-vacancy rate downtown approached 30 percent two years ago; it's now 10.8 percent.
Big deals gobble up Bellevue office space
By J. Martin McOmber
Seattle Times business reporter
MIKE SIEGEL / THE SEATTLE TIMES
A view of the downtown Bellevue skyline looking east. The office-vacancy rate downtown approached 30 percent two years ago; it's now 10.8 percent.
E-mail this article
Print this article
Search archive
Most read articles
Most e-mailed articles
Downtown Bellevue's office-vacancy rate plunged nearly 8 percentage points in the past three months, capping a dramatic turnaround for a city that recently ranked among the hardest hit commercial real-estate markets in the country.
The amount of available office space fell to 10.8 percent in September from 18.6 in July, according to a survey released yesterday by brokerage firm Cushman & Wakefield. The rate is the lowest since early 2001, when the region's collapsing high-tech economy began to abandon large chunks of space in Bellevue office towers.
The drop was no surprise.
Real-estate experts had been expecting a dramatic change after Safeco spinoff Symetra Financial and online retailer drugstore.com decided to move their headquarters to downtown Bellevue.
But the new number underscores just how fast the suburban city's fortunes have changed. Two years ago, the downtown vacancy rate neared a record 30 percent, a hole so deep many believed it would take the better part of a decade to climb out.
Today, developers including Kemper Freeman, Schnitzer Northwest and Equity Office Properties are once again maneuvering to add office towers to the skyline.
"The real nice places have all been leased up," said Tom Bohman, director of Cushman & Wakefield's Bellevue office. "What's left are the smaller places that are harder to lease."
Bohman predicts Bellevue's vacancy rate will continue to fall, but at a more modest pace. And he expects it will still take several years for average annual rental rates — which inched down from $23.23 in July to $22.99 a square foot in September — to increase enough to cover the costs of a new building.
If landlords in Bellevue are looking toward better days, they have Equity Office to thank. The Chicago-based real-estate investment trust and the region's largest owner of office space, lured Symetra and drugstore.com to office towers with attractive leases that consumed about 340,000 square feet of space.
Although both companies are moving from other Eastside locations — Symetra from Safeco's Redmond campus and drugstore.com from Sunset Corporate Campus near Interstate 90 — brokers expect those spaces to lease quickly.
Bellevue's improving office market also earned the city bragging rights for topping Seattle. For the first time in years, the suburban downtown has a lower vacancy rate than its urban counterpart.
Seattle's office-vacancy rate remained virtually flat for the past three months, falling one-tenth of a percentage point to 15.1 percent.
http://seattletimes.nwsource.com/ABPub/2004/09/28/2002049044.jpg