Published November
2001
Report:
Commercial
real estate market enjoys healthy third quarter
Herald
Business Journal Staff
Despite a slowing
economy, Snohomish County’s commercial real estate market came through
the third quarter in good shape, according to Cushman & Wakefield’s quarterly
industrial and office space reports.
The company said
the demand for industrial space remained “strong” and pointed to the office
market as “the next stage for commercial development in the Puget Sound
Region.”
During the third
quarter, a high level of leasing activity in the industrial market caused
the vacancy rate to decrease to 8.8 percent from 9.7 percent at midyear,
according to the report. And there was a positive net absorption of about
317,985 square feet, year to date.
Leasing activity
included:
- 200,000 square
feet under construction in Everett for JanSport.
- 54,000 square
feet in the Seaway Ridge building in Everett for National Foods.
- 24,000 square
feet in the Seaway Center building in Everett for TRW Aeronautical Systems.
- 19,215 square
feet in Everett’s Paine Field Business Park for Pacific Cargo.
- 12,300 square
feet in the Paine Field Business Park for A.E. Petsche Co.
- 20,000 square
feet in Lynnwood’s 180 Business Park for Olympic Paper & Supply.
Construction during
the third quarter totaled 131,176 square feet, of which 10.8 percent was
uncommitted upon completion, according to the report. Projects delivered
to market include:
- 40,000-square-foot
Audio Acoustics Building in Lynnwood.
- 27,400-square-foot
University Mechanical Building in Mukilteo.
- 40,000-square-foot
Casino Corporate Park II in Everett.
- 23,776-square-foot
Steel Business Park in Everett.
While the industrial
vacancy rate dropped, the office vacancy rate rose slightly from 15.2
percent at midyear to 15.8 percent in the third quarter, the report said.
The increase was minimal compared with Bellevue, which saw vacancy rates
soar from 14.6 percent at midyear to 20.7 percent by the third quarter.
“The Northend office
market continues to provide a low-cost alternative to the Eastside and
Seattle Central Business District for quality office/technology space,”
the report said, adding that as rental rates have decreased across the
region, office space in the county has followed suit, with rental rates
dropping from $23.41 per square foot at the beginning of the year to $22.25
by the third quarter.
Year to date, a little
more than 54,000 square feet of new office space construction has been
delivered, with the completion of Taylor’s Landing (25,000 square feet)
and the Ash Way Business Center (18,140 square feet) in Lynnwood and the
Rancetti Business Center (11,000 square feet) in Everett. Of that, 76
percent has been leased, the report said.
An additional 333,732
square feet of office space is under construction in the county, with
the 203,532-square-foot Cosmos Lynnwood Center expected to be completed
before the end of the year. The remaining 130,200 square feet is located
within two buildings at Opus Northpointe near Lynnwood, with a midyear
2002 completion expected.
Cushman & Wakefield
predict that despite “the local economy leaning toward a recession,” the
Northend industrial market will “stay in equilibrium through the end of
the year.” As for office space, the county’s many public and private projects,
including transportation and convention centers, will entice developers
to the area, the report speculated.
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