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Seattle and Eastside Office Sublease Trends May 2021

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SEATTLE
The aggregate amount of sublease space in Downtown Seattle saw a net reduction (-94,545 sq. ft.) for the first time since January, this month being characterized by more than cautious optimism and a slowed pace of space coming on the market. For the first time since the beginning of the pandemic, signed subleases outpaced the amount of space coming on the market substantially (~70,000 sq. ft. signed vs.~32,500 sq. ft. of new space added), paced by activity at F5 Tower and Two Union. Also important to note: no spaces larger than 10,000 sq. ft. were added in May, another first since the beginning of the pandemic. This momentum appears to have bled into June, with over 30,000 sq. ft. of sublease space being signed in the first few days of the month (not counted in the previously mentioned 70,000 sq. ft. total), and another 130,000 sq. ft. of space being removed by a number of large occupiers through the first half of the month. Though the market remains in historically high territory at 4.29 million sq. ft. of sublease space available, vaccinations and the subsequent easement of restrictions on returning to the office appear to have provided a much-needed jolt to the Seattle office market.

EASTSIDE

May marks the first month since the start of the pandemic that the Eastside saw a net reduction (-51,673 sq. ft., or 3.1%) in sublease space available, kicking off a positive trend for the market that will continue, and likely accelerate, throughout the rest of the year. Leasing activity has been a key driver of this trend, picking up both on the sublease front (18,500 sq. ft. at US Bank Plaza) and on a direct basis, with Symetra Financial Center withdrawing 77,000 sq. ft. of sublease space in May, half of which was signed on a direct basis. The Bellevue CBD saw a 66,000 sq. ft. net reduction in sublease space, reducing the percent of its inventory available for sublease from 7.8% to 6.5%. That statistic is likely to compress much further in the coming months as almost half of the 673,000 sq. ft. of sublease space still available is in talks to be leased. Overall, the mixture of vaccinations, returns to physical office space, and the attraction of tax-friendly zip codes have the Bellevue CBD and Eastside accelerating out of an unforgettable COVID-era.
 

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Seattle and Eastside Office Sublease Trends May 2021

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Jacob Pavlik

Research Manager

Seattle

Jacob Pavlik joins the Colliers team after working in the Economic Development and Planning departments for the cities of Hillsboro, Oregon and Alexandria, Virginia, respectively.  At Colliers, he leads a team of researchers to  collect, analyze, and synthesize market data for Puget Sound and Portland. He loves the challenge of taking complex data and making it easily digestible for a wide audience. He assists brokers with research specific to their client's needs, including geovisualizatoin and micromarket analysis.

His authentic passion for commercial real estate is seen most clearly when Jacob explores his local urban ecosystem and travels to new cities around the world to see how they function and relate to each other. He likes to see the built environment adapt to the changing needs, desires, and behaviors of the people who populate it. These functions fit perfectly into Jacob's role as Research Manager, telling the story of how commercial real estate in the Pacific Northwest evolves over time.

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