Companies are buying and filling up industrial space in Snohomish County, but greater demand for office space hasn’t yet materialized.
That’s the conclusion of Cushman &Wakefield’s quarterly report on the county’s commercial leasing market.
The good news is that the vacancy rate for the county’s industrial space fell from 15.6 percent in the second quarter to 13.6 percent in the just-ending third quarter.
That statistic doesn’t tell the whole story, Gary Bullington, a director for Cushman &Wakefield, said Wednesday.
“The activity in (Snohomish County) has been more in building sales than leasing,” he said, adding that companies buying space obviously are more committed to staying than those that rent.
The Boeing Co., which placed huge empty buildings on the leasing market in 2003, has taken some of that industrial space back, reserving it for its own use or for those of its vendors, Bullington said. That, as well as more airplane orders and the apparent end to the Machinists strike, will help, Bullington said.
While the industrial space vacancy rate improved during the third quarter, the office vacancy rate moved the other way. Cushman &Wakefield reported that 17 percent of the county’s office space was vacant, up from 15.8 percent in the second quarter.
Bullington pointed out that small changes in the market have a big effect on the vacancy rate because of the relatively small amount of office space in the county. Cushman &Wakefield lists less than 600,000 square feet of office space here, compared with more than 4 million square feet in downtown Seattle alone.
Brokers still say they are optimistic, however, that office space will fill up after King County’s office market improves with the economy. Bullington said he’s especially hopeful about the potential for filling up offices in Lynnwood, where empty space has been a serious problem since 2001.
“The driver in the office market is going to be the low-cost alternative and the commuting advantage of Lynnwood,” Bullington said. “For back office-type operations especially, Lynnwood makes a lot of sense.”
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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