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Seattle and Eastside Office Sublease Trends April 2021

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SEATTLE
In April, Seattle saw a modest monthly gain of sublease space, with a net gain of 73,000 sq. ft. coming onto the sublease market, with a monthly average of 239,000 sq. ft. in the last year, which is a 70% drop in sublease additions. This came primarily with the addition of 80,000 sq. ft. at Russell Investment Center, where Zillow put floors 7 and 8 on the market. The gain was less than that because of leasing at Amazon’s Rainier Square sublease and Liberty Mutual’s Safeco Plaza sublease, where Schroeter, Goldmark & Bender took the 33rd floor and engineering firm WSP took the 31st floor, respectively. There is a total of 4.4 million sq. ft. of subleases currently available, however there are signs that this number will get smaller as companies bring their employees back into the office this summer and early fall. Seattle’s submarkets vary widely in terms of the amount of inventory that is on the sublease market: Queen Anne/Magnolia has the most with 12.7% of their inventory on the market while Lake Union has the least with just 2.2%. Seattle CBD has 7.2% on the sublease market, or 2.5 million sq. ft., which is 57% of the total sublease market for Downtown Seattle.

EASTSIDE
In April, Eastside saw less than 100,000 sq. ft. of new subleases hit the market, bringing the total gain since before the pandemic to 1.6 million sq. ft., resulting in 1.8 million sq. ft. of subleases currently on the market. This monthly gain is 17% less than the average monthly gain in subleases on the Eastside since March 2020. The amount of sublease space on the market is widely expected to dissipate for two reasons later this year: first, leasing activity that is currently underway and second, people are expected to make a full or partial return to their physical office spaces this summer and fall. The uptick in tenant demand stems from greater confidence in a return to the physical office given the multiple vaccines available. This will result in many companies removing their space from the sublease market, taking the Eastside back to its typically tight supply. Bellevue CBD has the most of its inventory on the sublease market, at 7.8%, but three submarkets (Kirkland, Mercer Island, and Coal Creek/Issaquah) all have sub-3% of their inventory available for sublease. 


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Seattle and Eastside Office Sublease Trends April 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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