Amazon.com's deal to lease several floors of Columbia Center was purely pragmatic, real-estate brokers say. The online-retailing behemoth needed...
Amazon.com‘s deal to lease several floors of Columbia Center was purely pragmatic, real-estate brokers say. The online-retailing behemoth needed a big block of space, and the 76-story high-rise was one of the few places that had room for a big tenant.
But the move — Seattle’s signature dot-com setting up shop in a traditional black-glass high-rise — also symbolizes a shift that could affect the regional market for office space.
New-economy companies — from Internet ventures to tech startups — are increasingly looking at downtown locations, some brokers say. Companies that used to automatically land in suburban business parks are at least checking out office towers in the city.
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“Downtown Seattle is cool again” with tech firms, said Peter Truex, a vice president at the brokerage Colliers International. “It may be cool for the first time in a long time.”
As recently as five or six years ago, Truex said, software companies gravitated to the Eastside to find programming talent, moderately priced office space and parking.
Now, he says, city amenities are more of a draw, and businesses are starting to be attracted to the workforce that is living downtown.
“A lot of the entrepreneurs live [downtown] now,” Truex said. “They’re in a condominium in Belltown. So you have downtown living that then drives the downtown offices, which drives downtown social life. It’s moving towards much more of a 24-hour city.”
ThePlatform, a rapidly growing firm that handles music and video on the Web, recently signed for expanded space in Belltown, in the building that used to house Airborne Express corporate offices. Airborne left the building in 2004 after it was bought by the German postal service.
Ian Blaine, thePlatform’s CEO, said he considers the new location a competitive advantage at a cost not much higher than suburban space.
“For tech companies in particular, especially ones that are growing extremely fast, the challenge of hiring people is so great right now,” Blaine said.
When interviewing potential employees, Blaine said, “it’s pretty great to show them they can walk to Pike Place Market or Lower Queen Anne.”
Seattle isn’t the only downtown that’s benefiting. Downtown Bellevue’s office core is booming, with five office projects on the drawing boards and two slated to begin construction.
Low-rise suburban office parks have plenty of tenants these days, too.
Office buildings along the I-90 corridor on the Eastside saw their vacancy rates drop from around 8 percent to under 6 percent from the third quarter to the fourth quarter, Colliers said.
About 12.4 percent of downtown Seattle’s office space is still vacant, so landlords are more willing to cut deals, particularly for lower floors of older buildings. But even the most plentiful categories of space are tightening up.
Last week, Truex said, he was with a client looking at a downtown Seattle block of space being subleased by a tenant who didn’t need it.
“The space had been on the market for less than two weeks, and we were the second group that had taken a look,” Truex said. “A year ago, that never would have happened. Two years ago, that space would have sat for six months before the first prospective tenant would have looked at it.”
The region’s traffic woes also may be helping downtown with some types of businesses.
Oregon-based Integra Telecom, which sells telecommunications services to small business, recently decided to consolidate its offices in Bellevue and Kent at Columbia Center, where it will have 100 people by the end of the year.
“Why downtown? It’s a central location to service our customers,” said John Nee, the company’s vice president of marketing. “The Puget Sound geography doesn’t lend itself very well to getting around.
“When you look at our selling model of going door to door to small businesses, the central location really lends itself to an economically efficient model.”
Tom Boyer: 206-464-2923 or email@example.com