Hours & Info1-206-954-1099M-F: 8:00a - 8:00p
S-Sun: 9:00a - 7:00p
brokercandice on Parking in Seattle – New… Jennifer on Parking in Seattle – New…
Despite the higher office rents, many big companies are actually seeking out Central Seattle locations as downtown proves to be a better option for attracting employees. “There’s good and bad” in that situation, says one CEO who just leased new offices at Sixth and Pike.
It’s not just housing prices: Seattle is not the bargain it used to be for companies, either.
Historically, the city was a cheaper place to rent office space than a lot of other cities with advanced economies. That held true through last decade’s economic upswing, and during the recession.
But the city’s recent boom driven by Amazon and other tech companies has propelled Seattle up the ranks of the nation’s most expensive places to rent an office, passing Chicago and Los Angeles just in the last three years.
During that span, Seattle office rents have surged 31 percent, or about 2½ times faster than the national average, according to an analysis by Cushman & Wakefield for The Seattle Times.
And finding office space is getting harder, despite all those cranes putting up new office high-rises.
The vacancy rate has dipped to 5.7 percent, down from a high of over 20 percent during the recession and the previous recent low of 8.8 percent a decade ago.
Seattle now has a smaller share of offices sitting empty than San Francisco or Manhattan, the two most expensive commercial real-estate markets in the country.
In fact, Central Seattle has the lowest vacancy rate among the 10 biggest downtown office markets in the country, according to Colliers International.
The resulting space crunch has given commercial real-estate landlords all the reason they need to raise rents. And more institutional investors abroad and on the East Coast are snatching up office buildings at record prices — sometimes hundreds of millions of dollars — and then raising office rents to make their investment pencil out.
There has been a surge in office construction over the last few years, but it hasn’t been enough to stave off the rent increases for office space.
It’s easy to see why: Demand from companies has grown much more quickly than construction has kept up with.
Consider Amazon, which already occupies far more Class A office space in Seattle than any company has in any other big U.S. city.
The company’s growth has been enough to just about single-handedly offset new office construction.
Seattle has added about 8.8 million square feet of office space this decade, according to the Broderick Group. Over that span, Amazon alone has taken about 8.1 million square feet as of last summer, and its footprint has only grown since then.
That leaves “no space for other tenants to move to,” said Hughes McLaughlin, senior director at Cushman & Wakefield in Seattle.
Adding to the demand, Facebook is moving into 870,000 square feet of space in South Lake Union, while Google is preparing to move into the entire 620,000-square-foot office portion of a project underway next to Lake Union Park.
Overall, tech companies now make up about 75 percent of leasing in Central Seattle, up from about 50 percent two years before, according to JLL.
Commercial real-estate prices are rising at a rate similar to the city’s housing market. But while some people are being priced out of Seattle, brokers say there has been no mass exodus of companies fleeing the city.
Among big companies, the opposite is true: In recent years, Expedia announced its move from Bellevue to Seattle; Weyerhaeuser fled Federal Way for Seattle; and F5 inked a lease to move from the cheaper Interbay area to take over an entire new downtown skyscraper. Big companies based outside Washington also have ramped up expansion in the priciest Seattle business districts, led by Google and Facebook, but also including the likes of Airbnb, Uber and Snap.
Smaller companies haven’t always been able to follow suit, however. Some businesses that don’t make headlines have moved out to cheaper, outlying neighborhoods or towns, while others have struggled to even find the space they need.
“Some folks are saying now is the time to grow” despite the higher rents, said Mark To, executive vice president of JLL in Seattle, who represents companies looking to lease office space. “And there are others that sell to a national outfit or relocate.”
There are a few reasons that many companies are moving toward — not away from — the higher rents, brokers say. First, the rising economy that has contributed to the rent increases is also benefiting those businesses, helping to offset the higher operating costs with more revenue.
Also, unlike a person who can move to another, more affordable town and commute in a longer distance for work, a business that needs to be in downtown for things like client meetings and employee retention might not have that option.
Vera Whole Health, a 160-person health-care company, faced a decision on new offices recently when it outgrew its old space in the Pioneer Square area.
CEO Ryan Schmid said the firm decided to grow in the heart of downtown and, despite the higher rents there, signed a lease earlier this year for 14,500 square feet at Sixth and Pike, where 70 Vera employees work.
Many of his employees take public transit and want to be downtown, and the tight labor market is a big concern as the company tries to attract and retain employees. Plus, many of the firm’s business partners are within walking distance of the new office.
“Obviously rents are considerably higher in this market than other markets, but that’s also because we have a really strong economy,” Schmid said. “So there’s good and bad. If this were Detroit I wouldn’t feel so good about it.”
Not all companies can afford Seattle rents. But businesses with back-office functions that can operate in cheaper areas like South King County were probably already there before rents started surging recently, McLaughlin said.
Still, if rents continue to rise, more companies may find that being in the economic center is not worth the higher costs.
“We have reached a tipping point where companies downtown are really having to think long and hard as to whether the shift in Seattle is creating more opportunity and therefore worth the cost, or whether the shift is simply just adding to operating cost,” To said.
Then there are startups, which are often ill-equipped to deal with high rents. Nevertheless, the startup scene here hasn’t declined lately.
One reason: Co-working spaces like WeWork have sprouted up quickly to give very small companies and individuals the option to rent workspace by the desk on a short-term basis, which is more flexible than a traditional fixed long-term lease.
Office rents are charged by the square foot. Average annual rents citywide have surged past $40 per square foot for the first time, surpassing Chicago (about $38) and Los Angeles ($39), according to the analysis from Cushman and Wakefield. That level is still well behind San Francisco ($70) and Manhattan ($72). Boston and Washington, D.C., remain more expensive than Seattle, as well.
The nationwide average is just over $30.
Across all building types, the average rent in Seattle was $41.16 per square foot at the end of last year, up from $34.67 at the peak of the upswing last decade, and from a low of $26.44 during the recession.
Here’s what that means for companies in practical terms.
Let’s say you need to rent about 50,000 square feet of office — enough for about 250 employees.
Three years ago, that would have cost about $1.57 million a year for the average office. Now, it’ll run you about $2.06 million for new lease, or nearly an extra half a million dollars more.
Despite the many conveniences and advantages of modern life, well-being and contentment continue to evade many of us. The cure may be in an architectural concept that sounds new but is as old as the hills. Take a dose of biophilia and read how your home’s design can help you live a healthier, less stressful life.
Tony the Siberian-Bengal tiger was an attraction at a truck stop in Louisiana, USA until recently, when his life – lived out in a cage outside the petrol station – was cut short due to illness. The tiger spent most of his 17 years in the fume-filled artificial habitat, but had his owner known more about the links between an animal’s surroundings and its health and happiness, Tony’s story may have ended differently. Is there a lesson humans can take from Tony’s fate? Deprived of sensory stimuli, social bonds and connection with nature in our homes and workplaces, we may be heading down the same path. Biophilic design is being advanced as the next important focus in architecture and as a remedy, partly, for the plethora of modern-day conditions linked to fatigue and stress.
Biophilia literally translates as ‘love of life’. In the 1980s, American biologist E. O. Wilson proposed that evolution has soft-wired us to prefer natural settings over built environments. In Wilson’s words, we have “an innate and genetically determined affinity… with the natural world”. Exponents of biophilic design are attempting to address this instinct architecturally. Essential to biophilic theory is the idea that buildings aid our physical and mental health only when they are designed holistically. Rather than isolated elements – for example, simply putting plants in a building – benefits occur when diverse and complementary factors reinforce our experiences of nature. Wilson’s colleague Dr Steven Kellert named plants and natural lighting, and indirect influences through shapes, forms and materials that originate in the natural world, as some of the attributes of this kind of design.
Green building principles emphasise responsibility to the environment and efficient use of sustainable resources. Although biophilic design embraces these aims, its focus is more on the wellbeing of those who use the spaces. The merging of planet-based with human-based philosophies is causing a stir in architectural circles. Brian Donovan of BVN Donovan Hillcommented that “architecture will never be the same again”.
Biophilic design is a rediscovery of an ancient practice, not a new idea. For aeons, architects have recognised the place of humans in a wider ecosystem and integrated natural elements into built forms. Athens’ Parthenon, Rome’s Pantheon, and the ancient Vietnamese city of Hoi An are examples of biophilic design at work, although the label wasn’t attached until the 1980s.
Frank Lloyd Wright was a more recent exponent of biophilia. “Study nature, love nature, stay close to nature. It will never fail you,” he advised, and many of his buildings bear this out. Notably, his groundbreaking Fallingwater (pictured above) is so integrated with nature as to be inseparable.
Today, the concept of biophilia is supported by a more scientific understanding of the psychology behind building-based wellness. Exponents of biophilic design believe the large proportion of time we spend in built environments may contribute significantly to feelings of isolation, tension and lethargy.
Today, there is growing interest in designing restorative, productive and appealing buildings with sustained opportunities to engage with natural systems. Workplaces, medical and aged care facilities and, vitally, our homes are set to benefit hugely from this trend.
I got an e-mail from my Pemco Insurer today and it seems helpful for all…
It’s the heart of sweater season in the Northwest, and that means your dryer’s probably working overtime. Did you know that for all the fuzz you collect out of the lint screen, there’s another 25% that either ends up on the ground under your dryer vent or, worse, stuck in the dryer hose or trapped around the drum and motor?
That can clog airflow, cause overheating, and – since lint is flammable – even start a fire.
Safety experts recommend you get your dryer vent professionally inspected and cleaned about once a year, depending on how much laundry you do. And if you notice loads are taking longer than normal to dry or the clothes are coming out extremely hot or with a funny smell, stop using the dryer until you can get it checked out. Those warning signs may mean you’re overdue for dryer vent-hose maintenance.
To learn more, please see this month’s Perspective newsletter.
Wishing you hours of safe and toasty tumbling,
Your PEMCO Team
Home Upgrades and Your Taxes: What You Need to Know
Now that the New Year has arrived, we’re all looking for ways to make improvements in our lives, from getting fit to reexamining our finances to remodeling that horrid 1970s-style bathroom. If you’re planning to make any improvements to your home this year, here are some things you need to know about home upgrades and their tax implications.*
Tax Breaks for Home Improvements
So, if your project qualifies as a home improvement, does that automatically mean it’s tax deductible? Not necessarily. In fact, home improvements are generally not tax deductible. However, there are some exceptions and other kinds of tax breaks that may apply to you, including:
Whether you’d like to increase your home’s resale value or simply want to improve your living space, home renovations can be a valuable investment. Just be sure to keep the above information in mind before starting any project in order to maximize your tax savings.
The top 10 reader photos we received this year include a unique view of University of Washington cherry blossoms in the rain; the gentle love of a goose for its gosling and the visual poetry of autumn leaves swirling in a stream.
In many arenas, 2017 has shown there are always new ways of looking at things. Cameras prove that all the time, whether they’re pricey SLRs or run-of-the-mill smartphones.
Among top images from our readers in 2017 were this unique view of University of Washington cherry blossoms in the rain, or photos showing the gentle love of a goose for its gosling, or the visual poetry of autumn leaves swirling in a stream.
Over the past year, Seattle Times readers submitted hundreds of such images to our Reader’s Lens feature.
This photo is so rich. I love the depth that is a result of very effective lighting. Setting up three off-camera strobes in the dark and in the rain and getting the perfect angle on all the elements was no small feat. I admire this photographer for his tenacity, thoughtfulness and creativity. Everything in this image really “pops,” with so many parts for the eye to take in. The backlit subjects, illuminated trees, shiny raindrops and reflections on the pathway create so many layers. The low angle gives the photo impact it wouldn’t have otherwise by highlighting the raindrops and umbrellas. A successful photographer must have an aptitude for detail and the ability to see how all aspects of the image fit together in an aesthetically pleasing way. Well done, Mr. Nakamura!
— Angela Gottschalk, Seattle Times photo editor
At year’s end, we’ve chosen 10 favorites to be our Seattle Times Reader Photos of the Year — a grand-prize winner and nine honorable mentions.
The grand prize, a $250 gift card to Kenmore Camera, goes to Yoshiki Nakamura, of Seattle. In his image (above) of nighttime visitors to the UW’s grove of cherry trees, streaking raindrops add texture and depth to an iconic Seattle setting we’ve not seen photographed this way before. (See related story to learn more about the photo and the photographer.)
A $25 Starbucks gift card goes to Honorable Mention winners in three categories: Northwest Flora and Fauna (see the winning photos here), Northwest Fun and Adventure (see the winning photos here), and Northwest Scenics (see the winning photos here).
Judging was by Angela Gottschalk, Seattle Times photo editor; Times photo specialist Colin Diltz, and Brian J. Cantwell, Seattle Times travel & outdoors editor. Photo specialist Katie G. Cotterill assisted in selection.
Thanks to all who sent in so many images of Northwest life and living. Please keep sharing your recent photos from the region at seattletimes.com/submit-photos.
Seattle is among the five most-expensive big cities for renters. The median amount paid by Seattle renters across all units reached $1,448 last year, an increase of $92 from 2015. (Dean Rutz/The Seattle Times).
Seattle leapfrogged Washington, D.C., to become one of the most expensive cities in the country for renters, according to new census data.
New numbers from the U.S. Census Bureau shows that is Seattle is — for the first time — among the five most-expensive big cities for renters. The median amount paid by Seattle renters reached $1,448 last year, an increase of $92 from 2015.
The median is the midway point. Half the renters pay more, and half the renters pay less.
It’s certainly no surprise to anyone who’s at the whim of the local rental market, and that’s a lot of people. The data show about 331,000 people living in rental units in Seattle last year, a jump of close to 60,000 since the start of this decade.
Back in 2014 — a mere three years ago — I wrote about Seattle making its debut among the top 10 most-expensive rental cities. It seemed like big news at the time, but as it turns out, we were just warming up.
Since then, Seattle has climbed its way past Los Angeles, Virginia Beach, Honolulu, and even New York City, which we toppled in 2015.
Then, last year, we leapfrogged Washington, D.C., into the No. 5 spot among the 50 biggest cities in the country.
As for next year? Look out, Boston, we’re right there in your rearview mirror.
The biggest rent increase — $162 — was in San Jose, Calif., which also has the highest median of any major city. Portland saw its median go up by more than $100 for the first time, ranking the Rose City fifth for rent increases last year. Even at $1,153, it’s significantly cheaper than Seattle.
Some of the dollar amounts for median rent in the census data might sound strangely low. For example, the median for San Francisco is less than $1,800, but good luck trying to find a place for that amount in the City by the Bay.
The reason is that census numbers are not based on the present market rate, like many rental estimates you’ll see. Rather, the Census Bureau surveys people who are renting, and asks them what they pay.
People living in market-rate apartments are counted, of course, but so are folks in older and less-expensive units, as well as those in subsidized housing who may pay little or no rent at all. Many renters who have been living in their apartment for a long time pay far less than market rate.
And in San Francisco and New York, a significant number of units are rent-controlled and rent-stabilized, further bringing down the medians in those two cities.
Census figures also includes the estimated average monthly cost of utilities, if these are paid by the renter. This is intended to eliminate differences that result from varying practices — in one apartment building, some or all utilities may be included in the rent, while at the next building, the tenants might be on the hook for everything.
As tough as things are in Seattle, consider the poor folks renting in Bellevue. The median there jumped by a whopping $153 last year, hitting $1,846.
Bellevue is the extreme, but the census data show that all cities in our metro area are getting more expensive. And for the first time, Tacoma joined the $1,000 club — the median rent now is $1,054.
Looking for an escape from Seattle’s soaring housing costs? If you want flat rents — and are OK with flat everything — the cheapest big city in the U.S., with a median rent of $762, is Wichita, Kan.