Amazon, Facebook, Tableau, Zillow and a host of other technology companies are gobbling up office space in Seattle at an aggressive pace, and as you’d expect, office lease rates are on the rise as a result.
According to the most recent quarterly report from OfficeSpace.com, the asking rental rate in the Seattle area now comes in at $27.63 per square foot, up from $27.29 per square foot for the fourth quarter of 2013. Meanwhile, the vacancy rate has continued to decline, finishing the year at 12.41 percent. That compares to 15.3 percent four years ago.
Amazon alone is responsible for a big chunk of the new office space coming online in Seattle, and its appetite for office space is showing no signs of abating. But other companies are getting in on the act, too. Zillow, which is in the process of acquiring rival Trulia, a deal that is set to close Wednesday, announced in November that it plans to take over another five floors in the Russell Investments Center. The company said its base rent for the new space is $42 per square foot.
And just this past weekend, we reported on Facebook’s plans to lease 275,000 square feet at the Dexter Station building in the South Lake Union neighborhood, with room to accommodate as many as 2,000 employees.
Other companies — including Oracle, Alibaba, Apple, Dropbox, Sears and HP — have announced engineering centers in Seattle in recent months.
John Heimbigner of OfficeSpace.com said the downtown Seattle and South Lake Union areas are exploding with activity, since many companies want to be located near Amazon.com. “It is a hotbed” for tech companies, said Heimbigner.
This chart from OfficeSpace.com really tells the story.