In the first half of 2024, office tenants have signed for at least 4.2 million square feet in greater Seattle, led by 2 million square feet in Bellevue and other Eastside cities. CoStar data reveals that this is the strongest office leasing in the first half of any year since 2019.
Drawn to the newly renovated City Center Plaza in Bellevue, the Clark Nuber PS accounting firm plans to occupy 48,000 square feet of the 570,000-square-foot building in the city’s downtown. The company’s move is one of several on the Eastside that signify a positive commercial leasing landscape across the lake from Seattle.
Microsoft’s exit from the City Center Plaza to Redmond also opened the door for engineering and architecture firm HDR, which has leased almost 49,000 square feet of the building. TikTok, owned by Beijing-based ByteDance, has also picked up nearly 2 million square feet vacated by Microsoft in downtown Bellevue.
While office leasing is on the upswing on the Eastside, the picture is a little different across the lake. While residential property values have increased about 10% on average across King County since 2023, office buildings are taking a hit as many workers remain remote. Office building values dropped by as much as 40% from last year in downtown Seattle, Pioneer Square and South Lake Union. Only about half as many workers are spending their weekdays in downtown Seattle as compared to 2019. Back then, the downtown Seattle commercial vacancy rate was just 5.5%; in the first quarter of this year, that number stood at 29%.
Despite the more recent uptick in commercial leasing in Bellevue, the Eastside also experienced an increase in office vacancy rate, from 6% in early 2019 to 17% this year. Despite this rise in vacancy, the resurgence of interest in spaces such as the City Center Plaza speak to the efficacy of the building’s updated mix of private offices and flex working space. Other buildings would do well to emulate City Center Plaza, which was renovated to support tenants’ ability to accommodate a workforce that looks different than it did pre-pandemic.
This post was based on information found on CoStar and Seattle Times.
