The amount of empty office space in Snohomish County hasn’t changed much in recent months, which is both good and bad news.
Between 18 and 19 percent of office space in the south half of the county sat vacant during this second quarter, according to new figures from Cushman &Wakefield and Colliers International commercial brokerage firms.
That was down less than one percentage point from the first quarter, and consistent with the vacancy rates dating back more than a year.
With economic uncertainty hanging in the air, however, at least demand is steady, not worsening, said Derek Heed, a senior vice president with Colliers’ local office.
“We didn’t see any major tenants going in the opposite direction, either filing for bankruptcy or moving out,” he said. “It seems like the fundamentals locally are still good.”
Truth be told, the office vacancy rates did improve a fraction during the past three months. And Colliers points out that in downtown Everett, the amount of vacant office space actually decreased by nearly 5 percentage points during the past year. The vacancy rate in central Everett is estimated at below 6 percent.
“Downtown Everett is small enough that incremental changes look real big,” said Tom Hoban, co-owner of Everett’s Coast Real Estate Services. “We’re still not seeing the amount of demand we’d like to see.”
And office rental fees for office space have slowly kept inching up countywide. Cushman &Wakefield said the avearge asking annual rental rate for Class A — or premier — office space in Snohomish County was $25.43 per square foot this quarter. That’s up more than 5 percent over the past two years.
Improving demand is easier to see in the market for industrial space, which has led the county’s commercial real estate market activity for years.
This quarter, nearly 400,000 square feet of new industrial buildings were added to the market, which pushed up the industrial vacancy rate from about 6 percent to 8 percent, according to Cushman &Wakefield.
The new space, built at the eastern edge of the Seaway Center business park, was built without specific tenants lined up. That doesn’t happen unless developers are bullish on demand, said Gary Bullington, a director at Cushman &Wakefield.
“I would say this is a vote of confidence in this market,” he said, adding that the initial developer behind those new buildings — Panattoni Development — also is building a new 108,000-square-foot warehouse along W. Casino Road.
Heed predicted that at least half of the new industrial space in Everett will be filled by the year’s end.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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