Mixed-use commercial real estate fares better

Majestic Glove’s new building includes space for tenants. Some of it already is leased.

Gregg Riva, a senior vice president with Colliers International who represented Majestic Glove in real-estate transactions for a new headquarters, said most landlords with local industrial space weathered the past few years much better than property owners with office-only space to lease.

For example, in the third quarter of this year, more than 13 percent of office space in the area that includes the south half of Snohomish County was empty. For industrial and so-called flex space, which can accommodate both offices and industrial uses in one building, that vacancy rate was 7.4 percent, according to Colliers.

Riva added that average lease prices for industrial space in the south Everett area also has stayed higher than in other Puget Sound markets during the recession. Some of that has been due to the demand for space from Boeing suppliers who want to be close to the Everett airplane factory.

“Boeing has an effect, of course, but there are plenty of other businesses up there that are not Boeing-related that take advantage of the space up there,” Riva said.

Also, unlike office and retail spaces that can be relatively easy to move in or out of depending on economic conditions, warehouse and manufacturing space doesn’t tend to be affected quite as quickly, said Tom Hoban, chief executive officer of the Coast Group of Companies, an Everett-based commercial real estate firm.

“Both the industrial and apartment sectors have held up reasonably well because they’re tied to core functions,” said Hoban, whose firm manages more than $1 billion in properties. “People still need a place to live and things break and need to be replaced through manufacturing.”

Hoban said there is a ray of hope for the office space market, where demand waned dramatically during the recession. Vacancy rates for office space in the Snohomish County area are estimated at 13 percent or more, depending on the specific area.

“There’s finally some firming up in that sector, especially in the south end of Snohomish County,” Hoban said, adding that it will take longer for real improvement to reach Everett’s office market.

More in Herald Business Journal

Teddy, an English bulldog, models Zentek Clothing’s heat regulating dog jacket. (Ian Terry / The Herald)
Everett clothing company keeps your dog cool and stylish

Zentek uses space-age fabrics to moderate the temperature of pets and now humans.

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

Providence said to be in talks for merger with Ascension

The two Catholic health organizations have been exploring joining forces, sources say.

Hospital companies merge as insurers encroach on their turf

An anticipated deal between Providence St. Joseph Health and Ascension is only the latest.

DaVita to sell off medical groups including The Everett Clinic

Another round of health care consolidation means The Everett Clinic could soon get new ownership.

Engine trouble hits Air New Zealand’s 787 Dreamliners

A Rolls-Royce engine was shut down and was afterward found to be seriously damaged.

Washington, Amazon sue company over seller training programs

Braintree is accused of using deceptive ads promising information on how to make money on Amazon.

Lockheed-Martin dominates global arms sales, Boeing is 2nd

The combined sales of U.S.-based companies totaled $217 billion.

The Marine Corps’ version of the F-35 Joint Strike Fighter is designed to land vertically like a helicopter. (Lockheed Martin)
F-35 fighter costs, $1 trillion over 60 years, draw scrutiny

Pentagon’s ability to repair F-35 parts at military depots is six years behind schedule.

Most Read