Safeco's acquisition by Liberty Mutual could have an impact on the downtown Seattle commercial real-estate market. Safeco sold its 22-story...
Safeco’s acquisition by Liberty Mutual could have an impact on the downtown Seattle commercial real-estate market.
Safeco sold its 22-story headquarters tower in the University District to the University of Washington in 2006 and moved into leased office space downtown.
It occupies about 284,000 square feet in what is now called Safeco Plaza — a building still known to many Seattleites as “the box the Space Needle came in” — and 140,000 square feet in the Second and Seneca Building, said Kip Spencer, co-founder of the commercial real-estate database Officespace.com.
Those leases account for about one-third of the space in each building.
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When Safeco decided to move downtown, it had a big impact on the downtown office market, Spencer said, helping to boost rents and drive down vacancy rates. Developers committed to build several proposed office buildings partly as a result of Safeco’s move, he said.
Liberty Mutual and Safeco have said no layoffs are planned for now. But if company employment in downtown Seattle does drop, it probably would need less space.
And that could have ramifications for the broader office market — lease rates, vacancy rates, new projects.
“You can’t ignore that large a chunk of space,” Spencer said. “The commercial real-estate observers are watching the Safeco situation very carefully.”