Two Big Tenants Sign On at Wells Fargo Center

SEATTLE-The accounting firm Moss Adams LLP and smoking cessation services provider Free & Clear have leased a combined 106,000 sf in Wells Fargo Center, a 47-floor, 940,648-sf class A office building Downtown. The two headquarter relocations reduce availability in the Equity Office-owned building to about 16.5% from closer to 28%, according to officespace.com.Moss Adams LLP will occupy floors 27 to 29 in the building in a relocation from 1001 4th Ave., a circa 1969 office tower that is under contract to be sold to Hines. Moss Adams CFO Tom Bourne says the move to Wells Fargo Center, built in 1983, will provide the West Coast accounting with “newer, more efficient space.” Moss Adams’ brokers in the deal, Steve Hisken and Ed Curtis of Washington Partners Inc., add that EOP provided a competitive lease deal and that the building will provide efficient floor plates and attractive views.Free & Clear Inc. is moving its headquarters to the 18th and 21st floors of the building from the Group Health campus in Tukwila. The organization was launched 20 years ago as a department of locally based Group Health Cooperative and now provides smoking cessation services to HMOs, corporations and government agencies. Free & Clear CEO Tim Kilgallon says the company’s rapid growth required “a larger facility more suitable for our corporate headquarters and fully integrated contact center” and one that will “assist in our employee growth and retention.” Parker Ferguson of Flinn Ferguson Corporate Real Estate represented Free & Clear in the transaction.The negotiated lease rates for the leases were not released by the parties involved and not otherwise immediately available. The gross asking rental rate ranges from $24.50 for the building’s lower floors to $32 for the building’s view space. Current standard concessions Downtown are dropping the effective rate on deals by about 10%, local brokers tell GlobeSt.com.EOP’s director of leasing Shawn Jackson represented EOP in the above transactions. Pat Callahan, EOP’s Seattle region director, tells GlobeSt.com that about half of the space Moss Adams will occupy is some of the 135,000 sf in the building that Washington Mutual leases but will be vacating next year in favor of its new 890,000-sf headquarters tower. All told, WaMu leases some 1.2 million sf of space in the Seattle market and most of it will be vacated over the next two years as it occupies its new tower, which will be completed next year. The landlord for most of its leased space in Seattle is EOP. In addition to Wells Fargo Center, WaMu also will be completely vacating EOP’s Second & Seneca Building, a 480,000-sf building of which WaMu currently leases about 213,000 sf. Callahan tells GlobeSt.com that EOP is expected to continue to occupy the 240,000 sf it leases at 1111 Third Ave. and as much as half of the 400,000 sf it leases at 1201 Third Ave. Those two buildings and WaMu’s new tower–which are all within close proximity to one another–will form WaMu’s new urban campus, says Callahan. About 170,000 sf of WaMu’s space at 1201 Third already has been preleased to the Davis Wright Tremaine law firm, which will be relocating from 1501 Fourth Ave. The specter of WaMu leaving so much leased space in the market has kept lease rates from rising in recent months as vacancy has declined into the 14% range. While some brokerage houses predict that vacancy rates will rise again when WaMu makes its move, Callahan says that given the activity as of late there is a “reasonable likelihood” that vacancy will not rise. “Over the next two years, I think it’s realistic to think that growth in other sectors will more than offset the known reductions,” he says. Part of Callahan’s confidence comes from the lease deals that don’t get much press, which is to say the smaller deals. “While the larger transactions get a lot of press attention, the recovery has been strongest in the 3,000-sf to 5,000-sf range,” he says.Indeed, EOP says the small-tenant activity has prompted it to create two new product offerings in the market, “fast office space” and “business ready suites,” which are essentially ready-to-occupy space that allows small businesses to be up and running in their new location as quickly as possible, and on more flexible lease terms than the may otherwise be able to get. Callahan says the full floor being built out as multi-tenant “fast office space” in Bank of America Tower is 50% preleased and doesn’t open until November.