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Seattle and Eastside Office Sublease Trends August 2021

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SEATTLE
For the fourth month in a row, the amount of sublease space has fallen in Seattle, from a peak in April with 4.4 million square feet on the market down 13.6% to 3.8 million square feet last month. The largest reason for the decrease in August was software company Convoy signing for three floors, or 123,000 square feet, at Russell Investment Center. While the Delta variant of COVID-19 has caused many companies to delay re-opening their offices, real estate decisions are not as delayed as they were at this time last year. The average term remaining decreased to 29 months in Seattle CBD but remains elevated in Pioneer Sq/Waterfront at 67 months. Lake Union, Belltown/Denny Regrade, and Queen Anne/Magnolia all have average term remaining less than two years, making the space less competitive with direct lease offerings. Based on current deals in process, 500,000 square feet of space is likely to come off the sublease market by the end of this year, a further 13.2% reduction from what is presently available.

EASTSIDE
There is more demand for space on the Eastside than there is space, even when considering the 1.5 million square feet on the sublease market. The 47,000 square feet increase in sublease space available this month remains below the peak reached in April, when 1.7 million square feet were on the market. Now, there are 1.5 million square feet, and in the last 12 months, an average of 66,000 square feet came on the market each month. This is expected to continue dropping as the fall/winter months of 2020 into 2021 when a bulk of the sublease space on the Eastside was made available. The average term remaining is the highest along 520 Corridor and I-90 Corridor, with 38 and 44 months, making these submarkets the most likely to compete with direct space. Bellevue CBD and Kirkland have on average 32 and 31 months left, respectively. Demand for space on the Eastside is high, with multiple 20,000 – 50,000 square foot requirements actively looking around the market, even creating opportunities for some companies to pursue options in Seattle.  


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Seattle and Eastside Office Sublease Trends August 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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