rental-rates1
Source: Cushman & Wakefield

The Seattle metro area’s office market continues to heat up, with rents increasing and vacancies dropping, according to a new report out by Cushman & Wakefield. In fact, the red-hot tech market is responsible for much of the action, driving an office market that is outpacing much of the rest of the country.

“Expansions by tech companies such as Amazon, Zulily and Google within the Seattle-Bellevue-Tacoma area will continue to shape the economic and physical layout of the Puget Sound,” the reports says. Amazon is the big driver, transforming the South Lake Union neighborhood as well as the Denny Triangle area north of downtown.

Furthermore, a huge $2.3 billion project in Bellevue, known as the Spring District, could add as much as six million square feet of office space to the market. In Kirkland, Google is expanding its operations, doubling the amount of space at its campus.

Google's expansion plans in Kirkland
Google’s proposed expansion plans in Kirkland

Zulily’s move to the former RealNetworks space along Elliott Avenue near the Seattle sculpture garden also is bolstering the market. Fast-growing Zulily is taking on 236,000 square feet — more than double the space it has in Seattle’s Sodo neighborhood.

“We are very pleased to see the consistent economic upturn in the Seattle and Bellevue market,” said Dave Magee of Cushman & Wakefield in a statement. “The steady decline in vacancy rates and rise in asking rents are just two of the indicators of strength that sets the Puget Sound market apart from others nationally. Additionally, economic growth is expected to continue its upswing due to millions of square feet of construction underway bringing thousands of jobs to the market.”

In the Seattle commercial business district, vacancy rates declined by one percentage point on a year-over-year basis, with the Denny Regrade and Pioneer Square/International Districts seeing the biggest drop, down 4.5 percentage points and 7.2 percentage points, respectively. Both areas are known as tech hotbeds. Meanwhile, the study found that asking rents have jumped 3.2 percent

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