Overall, vacancy rates in the Puget Sound office market nudged up to 11.8% due to the addition of a new high rise in downtown, adding nearly 750,000 sq. ft. The regional Class A average asking rate rose to $37.87 per sq. ft., full service, driven largely by Downtown Seattle and the Eastside.
Coworking companies continue to expand, as most signed leases over 20,000 sq. ft. this quarter were from coworking companies. These included 46,482 sq. ft. leased by Spaces in Pioneer Square and 260,062 sq. ft. in total taken by other coworking providers.
Three large buildings are due to deliver in the short term; 2&U, Skanska’s 684,245 sq. ft. office tower, is expected to deliver in June of 2019, while 333 Dexter, a 616,584 sq. ft. building in Lake Union is completing later in 2018. Kirkland Urban the lone Eastside project under construction. Demolition began for the new Rainier Square project, estimated to complete in January 2020.
A new high water mark was set in both the Eastside and Seattle Markets for the sale price per square foot of an office building. Centre 425, the fully leased 356,909 sq. ft. office building in the heart of the Bellevue CBD, was sold for $877 per sq. ft., while Tilt49, a 290,573 sq. ft. office building in the Denny Regrade, sold for $924 per sq. ft.