By Bryan Corliss
Herald Writer
SEATTLE — Vacancy rates continued to climb in Snohomish County during the fourth quarter, but there was some increase in activity among biotech companies seeking industrial space in Bothell, a Seattle real estate company reported Monday.
"Bothell has definitely been the hot spot," said Gary Bullington, a director with Cushman &Wakefield.
Around Puget Sound, vacancy rates have continued to rise while rents on office and industrial space have fallen, company officials said during a briefing for reporters. Some reported cut-rate, even free, rent in areas of south King County.
However, there is some sign that "We’re sort of getting at the top of this," said Garth Olson, who follows the downtown Seattle market for the company. Rents still are falling and vacancies growing, but the rates are starting to slow, he said.
In north King and Snohomish counties, vacancy rates climbed from 15.8 percent to 20.4 percent during the not-yet-ended fourth quarter, Bullington said. The amount of empty office space jumped from 475,000 square feet to 675,000.
"That sounds like a tremendous shift in the market," Bullington said. But it’s a relatively small market, he added, subject to wide statistical swings.
Rent on Class A office space edged upward, going from $23.93 per square foot to $24.88. It was the first gain for landlords after two consecutive quarters of falling rents.
Rent rates still are running above 2000 averages, the company’s report showed.
Several office complexes are in the works in the area, Bullington said, including the 700,000-square-foot Opus North Pointe office center off 164th Street SW in Lynnwood. That complex already has landed its first major tenant, Cyprus Semiconductor, which plans to put designers there, he said.
Another is the Intercorps Industrial Center along Seaway Boulevard, which will total about 1 million square feet when finished. The first tenants will be a unit of TRW’s aerospace division, and Iron Mountain, a financial records storage company, Bullington said.
The north end is emerging as a "white collar engineering center," which has been less affected by the technology bust as the rest of Puget Sound, Bullington said. "This was not a location that dot-com companies, thank goodness, decided to focus on."
Instead, it’s becoming a "receiver market" for companies — particularly in the biotech sector — that are outgrowing their homes in Woodinville and Redmond, he said. "Those markets are pretty much built out."
The companies are pushing north into Bothell, Bullington said. Three or four "significant" deals could be announced there within the next couple of weeks, he said.
You can call Herald Writer Bryan Corliss at 425-339-3454
or send e-mail to corliss@heraldnet.com.
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