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Office Market Report Projects Bottoming Out This Year

SEATTLE-Despite increasing concessions and a flood of sublease space on the market that are driving effective rents lower, the latest report by Marcus & Millichap suggests that the market should stabilize by year's end.

By Joel Cone | Updated on June 19, 2003

SEATTLE-A minor growth in employment projected for 2003, less new product being delivered to market by developers, and an expected bottoming out of effective rents by the end of the year are positive signs that the market for office space may be turning the corner next year, according to the most recent Office Research Report just released by Marcus & Millichap.

“Seattle’s office market is not expected to experience a marked rebound over the next 12 months, yet the worst seems to be over,” said Gregory S. Wendelken, regional manager of the firm’s Seattle office. “Some submarkets will begin to recover prior to others, including Central Seattle and Kirland/Redmond/Bothell, as they were not significantly overbuilt in anticipation of the growth in the high-tech industry that failed to come to fruition.”

The report notes that total employment in the market declined by 2.4% in 2002 with manufacturing and the service sectors being the hardest hit, losing 29,000 jobs. Still, the report forecasts a 0.1% increase in employment by the end of 2003.

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