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Office vacancies in downtown Seattle remain lofty as shifting viruses hamper real estate expectations

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After a year of secluded life that emptied much of downtown Seattle, summer seemed to have signs of returning. Vaccines are up, the Pike Place market is filled with tourists and tech giants are making plans to get at fewest some of their employees back to their booths.

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Not so rapid.

With the spread of the coronavirus in Delta soaring, and public health officials once again recommending the wearing of masks, interrogate marks returned to expectations for office space in Seattle.

Google and Apple, both based in South Lake Union, have delayed their planned return to the office until October. Currently, Amazon, the city’s largest private employer, has indicated plans to return to the office in September.

The latest uncertainty is once again upsetting plans to return to office work prior the pandemic, just as commercial real estate experts have indicated that the downtown office market is start to recover — or at fewest escape the worst free fall of the former year.

However, commercial real estate brokers say they can expect a definitive return to the office, even if a month or two later than expected.


“We expect that the physical return to the office that has begun to recover will slow again until more is known about the Delta variant,” said Rod Kaufman, president of the Seattle King County Building Owners and Managers Association.

An estimated 40,000 office workers regularly work downtown, compared to about 170,000 prior the pandemic, according to Placer.ai cell phone data published by the Downtown Seattle Association.

This number has remained relatively constant for more than a year, even as visitor numbers and foot traffic in the city center rise. (DSA considers South Lake Union and other nearby neighborhoods to be part of downtown.)

The office vacancy rate in Seattle’s central business district is about 15%, nearly double the rate in beforetime 2020, according to data provided by commercial real estate firm Kidder Matthews.

Including job openings, upcoming job openings and sublettings, nearly 20% of downtown office space was available at the end of June, according to another company, Savills.

“We expect availability to decline gradually over the next few years, but renters should be in the driver’s seat in the near coming,” Savills CEO Eric Lonergan said in an email. He said the company expects an eventual “packed recovery”.

Local brokers say interest in roaming office space is growing. Barring unused closures, they expect more employees to work in offices following the fall school year begins.

“We’re very active with the tours,” said Seattle-office broker and Colliers executive vice president Greg Inglin.

Englen said some companies, especially tech companies, are adding space for unused employees. He said some of the spaces listed for subletting final year have now decided to grip on to them.

Englin said plans for the offices are taking shape months in advance, which means that employers are likely to go ahead with negotiating leases even with the changing uncertainty in Delta.

“There is some urgency to figure out their game plan,” he said following a year of delay.

An abundance of tech companies in Seattle could unkind a weaker recovery in demand for office space than some other cities.

One indicator measuring office space tours shows interest is starting to climb back toward pre-pandemic levels — although it has been slower in cities like Seattle and San Francisco than in New York, where some Wall Street firms are eager for employees to return to the office. packed time.

The gap is likely to decrease to the share of “remotely useful jobs,” according to VTS, which provides commercial property rental programs and produces the index. The company expects that demand for office space in Seattle and San Francisco will lag behind New York “in the coming.”

The beforetime months of the pandemic devastated the office market in Seattle. The amount of unoccupied office space has increased dramatically. Recently, this trend has slowed down.

During the first half of final year, the amount of office space available for subletting in Seattle more than doubled, according to commercial real estate firm Colliers. During the alike period this year, the area available for subletting increased by 5%.

Rental demand for Grade 1 buildings in Seattle’s central business district increased 3.2% in the second quarter from the previous quarter, but was still slightly down from the alike period a year earlier, according to Savills.

“A lot of companies are being watchful” to get their employees back into the office while they still reserve space, Kaufman said. “CEOs, especially in technology, want to bring people back.”

Lonergan said that most companies that are committed to working remotely in the lengthy term have fewer employees.

Floors of space are available for rent in some downtown buildings like Rainier Tower and 2+U’s, according to Colliers. Also available are multiple floors of Safeco Plaza, an office tower for a Boston-based company that it recently agreed to purchase for $465 million.

While the level of secluded work will vary by company, Steve Schwartz, a Seattle-based CBRE broker, said, “What our clients tell us is that they still need and want office space.” “The office will be a place to collaborate and work together and maybe less just for direct work.”



Referensi: www.seattletimes.com

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