Published November 2002

Slow economy hampers commercial-space growth

By John Wolcott
SCBJ Editor

Attractive industrial and office space in Snohomish County continues to beckon suitors, but the slack in the state’s economy is hampering growth, real estate marketers say.

The property firm Cushman & Wakefield released a third-quarter activity summary in October in Seattle that showed the overall office vacancy rate in the county was 19.9 percent, about 655,000 square feet of space, down only slightly from 21 percent in the second quarter.

The county’s industrial property vacancy rate was 13.6 percent, around 1.9 million square feet, up from the second quarter’s level of 10.6 percent, about 1.5 million square feet.

Spokeswoman Sue Baugh said she is confident the office market will improve as the economy picks up. She added that Lynnwood’s focus on creating a city center will attract a lot of attention to south Snohomish County.

“Lynnwood will become the hub where things are happening in the county,” she said, noting that the expansion of Alderwood Mall is a good indication of how the economy could grow in that area.

Baugh said Lynnwood’s demographics also make it a strong draw for businesses from King County, because “many of their employees already live there, and rather than driving into Seattle and Bellevue they prefer to work closer to home and avoid the commuting.”

As for industrial space, Cushman agent Tom Wilson said traffic congestion has made Snohomish County a prime attraction for distribution businesses that can no longer afford to serve areas north of Seattle from warehouses in the Kent Valley.

“Because it’s a master-planned community, Seaway Center (in southwest Everett) has an inside track in the future marketplace,” Wilson said. “We’re very active in marketing Seaway.”

He cautioned that the industrial vacancy rate of 13.6 percent for the county is misleading, since there are three very large high-tech properties totaling 950,000 square feet, including two very large facilities, the Wired Zone building in Mukilteo with 325,000 square feet and the Bomarc buildings (on Airport Way in southwest Everett) with 450,000 square feet.

“Those shouldn’t even be compared with the really competitive properties in the market, which would make the truer vacancy rate about 7 to 8 percent,” he said.

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