Market Report 3Q 2017 Office, Industrial & Retail Puget Sound Region, Washington Bellevue Seattle Tacoma www.nai-psp.com
Office Report Puget Sound Region Third Quarter 2017 $31.31 Rental Rates (Price/SF) 7.3% Vacancy Rates +2,046,986 YTD Net Absorption (SF) Source: CoStar Northend $24.67 Rental Rate ($/SF) 7.8% Vacancy Rate -108,878 YTD Net Absorption Seattle $38.53 Rental Rate ($/SF) 7.0% Vacancy Rate +906,059 YTD Net Absorption Eastside $34.63 Rental Rate ($/SF) 6.1% Vacancy Rate +1,068,671 YTD Net Absorption Pierce $22.12 Rental Rate ($/SF) 6.9% Vacancy Rate +110,986 YTD Net Absorption Southend $26.36 Rental Rate ($/SF) 10.9% Vacancy Rate +70,148 YTD Net Absorption Source: CoStar and Esri
AVERAGE ASKING RATES $31.00 $30.60 $30.20 $29.80 Featured Office Transaction VACANCY VS. ABSORPTION 3200 NE 45th Street, 3215 NE 45th Street and 3232 NE 45th Street, Seattle, WA 2,500,000 2,000,000 8.0% Aegis Living Partners purchased the 31,812 square foot property on July 10, 2017 for $13,200,000. Aegis Living, a national leader in senior assisted living and memory care facilities, will redevelop the site for senior housing. They currently operate 13 facilities in Washington state. 1,500,000 1,000,000 500,000 7.0% 6.0% The location is a good fit for Aegis as it will be able to serve the residents of Bryant, Ravenna and Laurelhurst. The site has high visibility and good drive by traffic, but yet close to the single family neighborhoods where most of our residents come from. - Walter Braun, Aegis Living, Senior Vice President Development 0 Absorption Vacancy 5.0% Ryan Olson recently represented the buyer in the purchase of this 3-parcel assemblage in University District. Noted Lease Transactions Tenant Building Size (SF) Market Submarket OfferUp Mercer Pointe 71,329 Eastside Suburban Bellevue WeWork Hill7 54,336 Seattle Seattle CBD Indeed Russell Investments Center 44,631 Seattle Seattle CBD Industrious 6th & Lenora Bldg 28,713 Seattle Belltown Noted Sale Transactions Buyer Building Sale Price Market Submarket Columbia Washington NorthEdge Office Properties NorthEdge $157,850,000 Seattle Wallingford BPP Exchange Building Owner, LLC Exchange Building $156,500,000 Seattle Seattle CBD UCP 2401 Elliott, LLC World Trade Center - North $65,000,000 Seattle Belltown Source: CoStar and CBA Bellevue Seattle Tacoma www.nai-psp.com
Industrial Report Puget Sound Region Third Quarter 2017 $9.22 Rental Rates (Price/SF) 3.4% Vacancy Rates +2,342,957 YTD Net Absorption (SF) Source: CoStar Northend $11.06 Rental Rate ($/SF) 4.1% Vacancy Rate +385,962 YTD Net Absorption Seattle $12.60 Rental Rate ($/SF) 1.8% Vacancy Rate +206,220 YTD Net Absorption Eastside $14.63 Rental Rate ($/SF) 3.6% Vacancy Rate -147,047 YTD Net Absorption Pierce $6.15 Rental Rate ($/SF) 3.4% Vacancy Rate +2,457,070 YTD Net Absorption Southend $8.00 Rental Rate ($/SF) 3.8% Vacancy Rate -559,248 YTD Net Absorption Source: CoStar and Esri
AVERAGE ASKING RATES warehouse only $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $- VACANCY VS. ABSORPTION warehouse only 2,000,000 1,500,000 1,000,000 500,000 0 (500,000) 4.3% 4.1% 3.9% 3.7% 3.5% 3.3% 3.1% 2.9% 2.7% 2.5% Featured Industrial Transaction Northend Logistics Building 1842 South 144th Street, SeaTac, WA 98168 Northend Logistics, LLC purchased the 48,328 square foot property on August 16, 2017 for $6,000,000 from Prologis USLV Operating Partnership, L.P. NAI Puget Sound Properties represented both parties in this transaction. Arie Salomon, Jeff Forsberg, and Connor Powell represented the Seller and Al Robertson represented the Buyer. Absorption Vacancy Noted Lease Transactions Tenant Building Size (SF) Market Submarket Holman Distribution Northwest Corporate Park - Bldg C* 204,000 SF Southend Kent Valley S Ind idx Corporation Prologis Park Puyallup - Bldg 4 132,500 SF Southend Renton Ind Open Square Westcore River Building 75,048 SF Seattle Gtown/Duwamish S Ind *R-Factor Valley Avenue Business Park - Bldg 4 61,479 SF Pierce Puyallup/S Hill Ind *NAI PSP transaction Noted Sale Transactions Buyer Building Sale Price Market Submarket Puget Sound Commerce Center ILP LLC Western Distribution Facility $57,500,000 Southend Burien REI Bellevue Campus, LLC Bellevue Distribution Center - Spring Street $49,283,000 Eastside Bellevue Alaskan Copper & Brass Co West Willows Technology Center $32,985,551 Eastside Redmond Source: CoStar and CBA Bellevue Seattle Tacoma www.nai-psp.com
Retail Report Puget Sound Region Third Quarter 2017 $19.51 Rental Rates (Price/SF) 3.7% Vacancy Rates +305,613 YTD Net Absorption (SF) Source: CoStar Northend $18.34 Rental Rate ($/SF) 4.1% Vacancy Rate -98,717 YTD Net Absorption Seattle $28.25 Rental Rate ($/SF) 2.5% Vacancy Rate -198,127 YTD Net Absorption Eastside $25.50 Rental Rate ($/SF) 2.9% Vacancy Rate +247,094 YTD Net Absorption Pierce $16.41 Rental Rate ($/SF) 4.7% Vacancy Rate +139,108 YTD Net Absorption Southend $18.38 Rental Rate ($/SF) 3.8% Vacancy Rate +216,255 YTD Net Absorption Source: CoStar and Esri
AVERAGE ASKING RATES $19.80 $19.60 $19.40 $19.20 $19.00 $18.80 $18.60 $18.40 $18.20 $18.00 $17.80 $17.60 $17.40 600,000 500,000 400,000 300,000 VACANCY VS. ABSORPTION 4.0% 3.0% Featured Retail Transaction Planet Fitness 13208 Bothell Everett Hwy, Mill Creek, WA Planet Fitness leased the 25,333 square foot property from PK II Gateway Shopping Center, LLC in July 2017 for 120 months. Planet Fitness is one of the largest fitness club franchises by number of members and locations, with a reported 1,400+ clubs. 200,000 100,000 0 Absorption Vacancy 2.0% NAI Puget Sound Properties represented the Tenant in this lease transaction. Source: CNBC Noted Lease Transactions Tenant Building Size (SF) Market Submarket Hobby Lobby 201 37th Ave SE 58,076 SF Pierce County Puyallup LA Fitness Mukilteo Speedway Center -Bldg 1 50,000 SF Northend Everett *Planet Fitness 13208 Bothell Everett Hwy 25,333 SF Northend Mill Creek/Woodinville Michaels 1600 W Armory Way 25,000 SF Seattle Queen Anne/Magnolia *NAI PSP transaction Noted Sale Transactions Buyer Building Sale Price Market Submarket Merlone Geier Management, Inc. Sears Portfolio $26,000,000 Southend Federal Way Trinity Partnership 3 LLP & Carolyn Court Apts LLC Kohl s Lynnwood $15,200,000 Northend Lynnwood Sun Trust Equity Funding LLC /Trust McLendon Hardware $15,049,407 Southend Renton/Tukwila Source: CoStar and CBA Bellevue Seattle Tacoma www.nai-psp.com
600 108th Avenue NE Suite 340 Bellevue, Washington USA 98004 +1 425 586 5600 1700 Seventh Avenue Suite 2050 Seattle, Washington USA 98101 +1 206 332 1466 1201 Pacific Avenue Suite 1703 Tacoma, Washington USA 98402 +1 253 383 3100 nai-psp.com