EVERETT — The amount of vacant office space leased in Snohomish County improved during the first quarter, officials said.
And that’s reason enough for optimism after two years of mostly flat or slightly worsening vacancy rates.
“There’s going to be more activity,” said Gary Bullington, a director at Cushman &Wakefield. His firm reported that just under 19 percent of the county’s office space stood vacant during this first quarter, down from more than 20 percent in 2007’s final quarter.
About 68,000 square feet of space have been leased this quarter, with the Cobalt Group’s new branch office in Lynnwood accounting for 40,000 square feet alone. That’s not a tremendous amount leased, but it’s enough to push down the rate by a percentage point or so.
The last time the county’s office vacancy rate dropped below 19 percent was the first half of last year.
“That office market never gets red hot, but the stream of activity we’ve seen in the last two quarters is more than I’ve seen in years,” said Gregg Riva, a senior vice president with the local office of Colliers International.
Some of the same things that Cobalt executives cited this week in their decision to locate in Lynnwood, including favorable lease costs and a good pool of qualified workers in the area, are attracting interest from other companies. David Kleitsch, Lynnwood’s economic development director, said other sizable leases of office space in the city are in the works, a fact both Bullington and Riva confirmed.
The countywide average annual cost for first-class office space has slipped under $25 per foot, compared with more than $38 in downtown Seattle and Bellevue.
That cost disparity helps to make office space in Snohomish County more attractive for companies that don’t need to be located right in Seattle, Bullington said.
Demand, and thus high prices, for space in Seattle and Bellevue doesn’t seem ready to ebb. Marcus &Millichap recently ranked the Seattle area as the nation’s No. 1 market for office properties in the real estate investment firm’s annual National Office Property Index.
Cushman &Wakefield estimated the vacancy rate for industrial space, used for manufacturing and warehouse uses, has fallen to just more than 6 percent in Snohomish County, the lowest level in more than four years.
The recent announcement that an aerospace-related company plans to move from Seattle to the Maltby area, along with similar interest from other manufacturing companies in relocating to Snohomish County, means that vacancy rate likely will stay low, Bullington said.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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