Seattle turned in the best performance this past second quarter among the top 10 office markets in the nation, with the biggest drop in vacancy and the largest volume of space absorbed, driven mainly by major tech-company leases, a report by Colliers International shows.
The city’s office vacancy rate dropped by 1 percentage point, to 6% ― the greatest drop among the top 10 markets. In addition, some 1.6 million square feet of space was absorbed in the market, also the highest amount of space absorption among the nation’s top 10 office markets.
“Tech firms drove both absorption and leasing activity in the second quarter,” Colliers reports. “F5 Networks moved into 515,520 square feet in the F5 Tower in the central business district.
“On the leasing front, Apple claimed the entire 620,000 square feet at the 333 Dexter development in Lake Union where it will house 2,000 new jobs. In addition, Dropbox took 120,885 square feet at the 2+U development in the CBD.”
Some 3.4 million square feet of new construction is expected to come online in Seattle through the balance of the year, the report notes, although much of this space is already committed ― including the 521-foot-tall, 1.1-million-square-foot Amazon Tower II in the Denny Triangle neighborhood.
Trailing Seattle in the second quarter on the space absorption measure among the nation’s top office markets were Manhattan, New York, 1.3 million square feet; Washington, D.C., 486,935 square feet, Chicago, 441,070, square feet; and the San Francisco Bay Area, 126,015 square feet. Houston, Los Angeles, Atlanta, Dallas and Boston all recorded negative space absorption ― more space returned to the market than leased during the second quarter. Only Manhattan and San Francisco recorded lower vacancy rates for the second quarter than Seattle ― at 5.6% and 5.5%, respectively.