Farra's prediction for 2005: "We will have new architecture and landscapes, and the (Eastside) market will be doing well economically. New buildings (while several projects are currently stored in mothballs) will be built, leased and profitable. We won't be seeing the high and low spikes (of the recent past)—-but gentle growth, which is really good."
Jeff Scanlan, vice president of CB Richard Ellis' Bellevue office, is also optimistic about the long-term health of the office economy here. "Looking at the big picture, Seattle is still attractive," he says adding, "However, vacancy rates will probably be in the 8% to 12 % range for a while." They are by best estimates currently in the 8% range.
Scanlan views the return of equilibrium between property owners and tenants in a positive light. "The life cycle off a deal has returned to normal. Last year (when companies were frantically scrambling to find space), Scanlan says it was difficult to provide value to would-be tenants. "Back then we might have an hour to make a move. We'd tell our clients, 'We can bring a blueprint or a black pen.'"
In the ten years from 1983 to 1993, Scanlan says average annual absorption of Eastside office space ran one million to 1.2 million sf. In 1999 and the first several months of 2000, it was hitting a torrid three to four million sf per year. Now, with an inventory of 23.3 million sf and a dreary climate, Scanlan expects absorption to run between 1.5 million sf and 2.0 million sf. "We (as brokers) are, of course, working a lot harder these days," he says. In the heyday of dot-coms, when old leases expired (or growth was anticipated) companies were adding space in chunks of 10,000 to 25,000 sf, or more. "Without that sector, most (more traditional) companies are only adding another 500 sf to 1,000 sf," Scanlon says.
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