Office space across the Eastside remained tight during the first half of 2018 with low vacancy rates.
A new report prepared by the commercial real estate firm Kidder Mathews showed that vacancy rate across the Eastside sat at 5.83 percent, an area which has seen a nearly 66 percent decrease in available office space since 2010. Much of its report excluded the large leasers of Microsoft and offices in Bellevue’s central business district. Let’s take a look at some of the numbers, and there’s a lot of them.
The Eastside had around 33.8 million square feet of office space spread over nearly 1,300 buildings. East King County, including Issaquah, North Bend, Preston and Snoqualmie had the lowest vacancy rates at 1.35 percent out of a total of 3 million square feet. This was followed by Redmond, excluding Microsoft, which had just more than a two percent vacancy rate and 5.8 million square feet of office space. Kirkland had a 3.85 percent vacancy rate and 5.1 million square feet of space.
Bothell and suburban Bellevue had the highest rates of vacancy, with nearly 7.5 percent of Bothell’s 4.3 million square foot stock sitting vacant, slightly lower than the 7.6 percent of the 15 million square feet seen in suburban Bellevue. Within Bellevue’s central business district there was 10.7 million square feet of office space, which had a vacancy rate of just more than four percent.
This didn’t stop two tech giants from acquiring new office space on the Eastside though.
The Puget Sound Business Journal also reported that Facebook and Google are expanding in Bellevue.
Earlier this month, the Journal wrote that an anonymous source within Facebook said the company is planning on signing leases in three Bellevue office towers including the Civica Office Commons, Skyline Tower and Key Center. Facebook could also be looking at a larger lease in the Spring District development, the Journal wrote.
A spokesperson for Facebook told the Reporter in an email that they have no comment.
In another report, the Journal said Google had leased 80,000 square feet in the One Twelfth @ Twelfth office near downtown Bellevue and plans to lease 30,000 additional square feet of space.
Other businesses were busy acquiring and leasing space over the first half of the year as well. This includes Costco acquiring nearly 98,000 square feet in Issaquah, Puget Sound Energy picking up more than 91,500-square-feet in Bothell and Microsoft pocketing an additional 82,700 square feet in Redmond. In addition, Google acquired nearly 79,000 square feet in Redmond.
In terms of actual office sales, the report found that activity is high and on pace to meet 2017 levels. The Eastside was fetching around $337 per square foot on average, an increase of 1.07 percent compared to the end of 2017, the report found. There were 22 sales of Eastside offices with 13 happening within Bellevue.
While office space is scare on the Eastside, industrial space is even tighter, with a measly 1.25 percent vacancy rate. The only major industrial development the report noted is a 400,000 square foot warehouse and distribution center being built in Maltby. However, the report did not expect this to loosen the market since 102,000 square feet has already been leased and it has received much attention from other potential tenants.