Seattle’s office leasing market has grown to 81.3 Million square feet. The former Washington Mutual/Russell Investments Center Building sold to Mutual Life for three years ago for $115 Million and now just sold for $480 Million. F5 just took half of a new tower, now named after them, and the office market seems to be unabated. The rents are now approaching $45 per square foot, pushing us towards San Francisco and other world class market rates. But is it all good?
The other side of the story is the sublease market in office rentals. Commercial real estate is cyclical and our market is no exception. Law firms are downsizing in terms of the square footage per person, F5 is upsizing to accommodate growth. In both cases, as is true for other companies, they are leaving existing leases to move. This is creating a huge volume of sublease opportunities at relatively discounted rates in the market place. These are large block spaces, most over 100,000 square feet. The small entrepreneur and start ups are struggling to find smaller spaces. It is an interesting time in Seattle.