On the industrial side, the house says that sector--with just over 189 million sf--is bumping up against a double-digit total vacancy rate with 9.88% and a direct measure of 7.64%. Nonetheless, there were a few slivers of silver lining about the otherwise overcast market.
Rob Aigner, Colliers executive managing director here, says, "The market appears to be warming up a bit." But he concedes the activity has only heated to a slow simmer, with renewals and cut-rate rent hunters responsible for the majority of deal flow.
As for what's hot and what's not, Jeanette Ferguson, an analyst with Colliers Seattle, tells GlobeSt.com, "Biotech is the buzz here. Everyone is hoping (that industry) will be a knight on a white horse for real estate."
She says government is currently the biggest mover and shaker in the downtown Seattle office in the arenas of both new leases and new construction with new city services and federal courthouse buildings, respectively.
Colliers' VP Jesse Ottele calls the more than 16.5 million sf of Class A space here the first quarter's "bright spot"—which sported a positive net absorption of 101,350 sf. While that is a mere drop in the bucket, it is still noteworthy in a market where space give-backs have been significantly steady over the last 18 months.
The smaller, suburban sub-markets says Ferguson, had the roughest time of it the first three months of the year. "When the CBDs were fetching $50-and-up rents, tenants were looking to the areas with lower rents. Now, with rents dropping in the core areas, the smaller markets aren't as desirable."
Derek Heed, also a VP with Collier's Seattle office, says one of those outlying sub-markets, the Northend, was fortunate in landing a 60,000 sf lease by Washington Mutual Bank. But, putting the deal into perspective, he says the deal was not only a bright spot for Snohomish County, "It was one of the biggest deals complete in the whole Puget Sound."
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