Published August 2004

Report: Office vacancy up slightly in second quarter

SCBJ Staff

The Snohomish County office vacancy rate edged higher during the second quarter, but a couple of building sales could have a dramatic impact on the northend office scene in coming months.

That’s the word from commercial real estate firm Colliers International, which recently released its second-quarter office vacancy report for the Puget Sound area.

According to the report, total office vacancy for the northend stood at 17.05 percent at the end of June, up from 16.8 percent during the first quarter of the year, with a negative net absorption of 10,369 square feet.

On a city-by-city basis, the report found that:

• Edmonds’ office vacancy rate increased from 5.80 percent to 6.21 percent, with 20,971 square feet vacant.
• The Everett downtown core had an office vacancy rate of 3.97 percent, down from 4.38 percent in the first quarter, with 25,561 square feet vacant.
• South Everett’s office vacancy rate increased from 13.99 percent in the first quarter to 16.07 percent in the second quarter, with 128,255 square feet vacant.
• Mill Creek’s office vacancy rate decreased from 11.54 percent in the first quarter to 10.30 percent in the second quarter, with 17,100 square feet vacant.
• And Lynnwood’s office vacancy rate decreased slightly, from 31.20 percent in the first quarter to 31.05 percent in the second quarter, with 500,344 square feet vacant.

It is in Lynnwood that two building sales will have a “dramatic impact,” said Colliers, including the 176,000-square-foot Quadrant I-5 Center building formerly occupied by Boeing and recently sold to Mortgage Investment Lending Associates. The company plans to occupy 110,000 square feet in the building, which has been vacant for about three years, the report notes.

Also in the Quadrant I-5 Center, Teal Properties LLC has purchased a 59,000-square-foot vacant office building for $4.62 million, or $78 per square foot, and plans to occupy about 15,000 square feet of the building during the third quarter, Colliers reported.

Looking at other markets in the Puget Sound region, the report noted that downtown Seattle’s office vacancy rate was down slightly in the second quarter, at 14.69 percent; the Eastside office vacancy rate stood at just over 15 percent; south King County had an office vacancy rate of 29.6 percent; and Pierce County’s office vacancy rate stood at just over 10 percent.

Overall, the three-county Puget Sound area had an office space inventory of 86.7 million square feet at the end of the second quarter, with a total vacancy of 16.07 percent and absorption of 316,795 square feet.

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