July 7, 2020
Seattle’s sublease market is starting to reflect the impacts of the COVID-19 shutdowns and resulting economic downturn. Research by NKF reveals a 13.2% increase in sublease space since April 1st in Seattle. The amount of sublease space has climbed to more than 2.45 million square feet and pushed up the availability rate to 3.8% on a base of 64.8 million square.
NKF’s Jesse Ottele says, “Our Q2 2020 numbers for Downtown Seattle show vacancy at 5.7% and show the Eastside at 4.9%, so a little bit of sublease space shouldn’t dramatically affect the market.”
Seattle’s CBD is taking the hardest hit with 55 subleases offering nearly 1.6 million square feet of space to the market. No other Seattle submarket has more than nine sublease spaces on the market.
Ottele also points out, “Approximately one million square feet of that sublease space (on the Seattle side) has been on the market for over a year with Amazon space at Rainier (610KSF), F5 Sublease (300KSF) on the waterfront and galvanize (90KSF) space at 111 S Jackson, so the new sublease space is not that bad compared to other large tech cities on the West Coast. Most of the new subleases we are seeing are smaller in nature (10-20KSF) and terms are generally shorter (2 to 3 years). “
In term of sizing, there are seven subleases of 50,000 square feet or larger on the Seattle market totaling 1.2 million square feet. The 20,000- to 49,999-square-foot category has 25 subleases totaling 670,365 square feet, the 10,000- to 19,999-square-foot category had 23 spaces totaling 330,425, and the small space category (5,000 to 9,999 square feet) had the highest number at 31 subleases but it only added up to 222,632 square feet.
The Puget Sound’s Eastside market is faring better, notes NKF. The percentage of sublease space has risen 7.1% since April 1st, with 587,609 square feet available and a 1.7% sublease availability rate. The Bellevue CBD submarket is carrying the brunt of the Eastside’s troubles with 17 subleases on the market totaling nearly 240,000 square feet.
For comments, questions or concerns, please contact Dennis Kaiser