Redmond Attracts Investors Due to Rapid Tech Expansion
The greater Redmond market has been driven by the explosive growth of Facebook’s virtual reality division, Oculus, which now occupies more than 885,000 square feet, and investors are taking notice.
The Redmond submarket has been the most dynamic and strongest performing of the Eastside submarkets during the past 12 months. Since 2010, more than 4,000 multifamily units and 22,000 single-family homes have been delivered, with an additional 1,300 multifamily units currently approved and permitted, according to Transwestern.
As a part of that strong growth level due to a robust job market here, Redmond Technology Center recently sold for an undisclosed price on behalf of one of Transwestern Investment Group’s managed funds. The 101,695-square-foot class-A office building is located at 18300 Redmond Way.
The Redmond Technology Center is 93% occupied, anchored by Pushpay Ltd. The multi-tenant office building is leased to six established local and international companies with staggered lease maturities.
Redmond Technology Center is a LEED Gold-certified asset constructed in 2008. The building features improvements throughout including exposed-ceiling creative workspace in the majority of the tenant suites, a two-story lobby, underground parking and a fitness center. The fitness center is a unique and coveted amenity in the submarket that allows employers to attract and retain top talent.
The East Link light rail extension is part of a regional effort to accommodate the influx of residents into the area and will include a future station within walking distance to the property. The light rail will connect riders from the Eastside’s population and employment centers to downtown Seattle, Sea-Tac Airport and the University of Washington.
The overall Seattle office market has been among the strongest in the nation led by the rapid expansion of tech giants, Amazon, Microsoft and Facebook. And, the greater Redmond market has been driven by the explosive growth of Facebook’s virtual reality division, Oculus, which now occupies more than 885,000 square feet. This has led to a rapid decline in vacancy to just 1.5% at the end of the second quarter, the lowest level since fourth quarter 2000, according to Transwestern research.
Redmond is also the home of Microsoft, which controls approximately 15 million square feet in the submarket. The company recently announced plans to expand and renovate its main office campus to accommodate an additional 8,000 employees on top of its approximately 47,000-person head count currently in the market.
“Investors are very confident in Seattle because of the robust tech presence. Seattle is consistently in the top 10 US markets for investment volume and frequently in the top five,” Paul Garancis, senior managing director at Transwestern Investment Group, tells GlobeSt.com. “For example, Seattle saw over $6.8 billion in investment sales volume for the first half of 2018. That’s up 24% from the same period in 2017 and puts Seattle at the number seven investment market behind Manhattan, Los Angeles, Dallas, Chicago, Atlanta and Phoenix. It’s clear that the tech industry will continue growing and the natural barriers to entry give investors confidence for long-term investment commitments.”
Kidder Mathews represented the seller in the transaction.