As the DJC reports today, owners of the 12-story 1st and Stewart Building are placing the property up for sale at the same time two new downtown office buildings are staking real-estate signs. In addition, the Seattle Post-Intelligencer Building and Seattle Tower were recently put on the market.
Meanwhile, other office buildings, like the WaMu Center, are clearing out their tenants. Companies that had planned to expand into new downtown spaces, including Microsoft and Starbucks, are retreating to their headquarters. And more lanky office towers are in the works downtown. In short, the inventory of commercial office space grossly exceeds the demand for offices. We’ve probably got 10 years of inventory that will sit empty.
Unless. That is, unless the glut of inventory and declining rents make Seattle irresistibly appealing to a major tenant. “I would guess we will be surprised,” says Kevin Daniels, principal of the development firm Nitze Stagen, referring to the potential for a major company moving its headquarters to Seattle. Maybe Daniels is being a bit optimistic; he's planning a 43-story office tower on 5th Avenue and Columbia Street. “It will be a very large user who we didn’t think we would see or we thought were going somewhere else,” he speculates.