South End gets developers' nod as next office market
Puget Sound Business Journal (Seattle) - by Brad Broberg Contributing Writer
Always an option, rarely a destination.
That's life in the South King County office market.
Only when vacancies dry up and rents hit the roof in downtown Seattle and the Eastside do many companies look south for Class A digs.
But times may be changing. Completed and pending projects stretching from Renton to Kent to Federal Way are raising South King County's reputation and giving companies a reason to regard the area as something other than a low-rent last resort.
"I think it's coming into its own more and more," said Richard Davidson, a broker with Kidder Mathews & Segner. "But that's a shift that will take time."
Time and more projects like Southport. "We are going to be taking people away from Bellevue and Seattle," predicts Alex Pietsch, marketing and public relations manager for Wright Runstad & Co., the project's developer. "It's going to be premium office space."
Southport consists of a 750,000-square-foot office building being built by Wright Runstad plus a hotel, apartments and marina being built by Seco Development - all on 17.5 acres along the Lake Washington shoreline.
The nine-story office building will feature triple towers rising from a common base. A lobby and some parking will occupy the first floor. More parking will take up the entire second floor. The third and fourth floors will offer 123,000 square feet of space each.
From the fifth through ninth floors, the building will branch into three towers, with each floor of each tower consisting of 35,000 square feet.
Pietsch said Southport's location will appeal to companies wishing to triangulate themselves between three key business magnets - downtown Seattle, Bellevue and Sea-Tac Airport. "And it's set right on the water," he said.
Southport currently is moving through Renton's permitting process. Pietsch said it will open in stages beginning in late 2002.
Two other major projects are in the Renton pipeline, said Sue Carlson, the city's administrator of economic development. A land-use permit has been approved for Southpoint, a 300,000-square-foot building proposed by Opus Northwest. Meanwhile, a land-use permit is pending for the City Center Building, a 137,00-square-foot structure proposed by Oakhurst Development Co.
Carlson said Renton considers itself "more of a subset of the Eastside than part of the South End. I would call us a transition market. We have people that come here because of the price and people that come here because of the location and amenities."
Another office project that could change the way people think about South King County is Centerpoint. "I think it's a bellwether for what will happen if we have more spaces," said Jackie Skaught, economic development manager for the city of Kent.
Centerpoint consists of 750,000 square feet of institutional office space that Intracorp bought from Boeing and remodeled into Class A space.
Although tenants are signing leases at a reasonable pace, Centerpoint dumped a lot of square feet on the market in 1999 and 2000. That space inflated South King County's year-end vacancy rate to 13.4 percent, skewing an otherwise strong 2000 performance, said Cleita Harvey, a broker with Trammel Crow. Even with Centerpoint, the vacancy rate still fell from the start of the year, when it was 15.2 percent, she notes.
Harvey agrees that South King County is beginning to shed it's ugly stepchild image - if not for everybody then at least for companies seeking back-office space or proximity to the airport.
Like Kent, Federal Way also felt a sudden bump in office space during the last two years. And it's all due to one developer - Quadrant. Since 1999, Weyerhaeuser's real estate division has been busy putting up numerous office buildings around the timber company's Federal Way headquarters.
Known as East Campus, the development will have brought 678,000 square feet of space on line by the end of this year, said Bill Frame, a broker with Kidder Mathews & Segner. That doesn't include 40,000 square feet that came on line in West Campus last year.
That may seem like a glut, but the buildings are 99 percent leased, said Frame. Companies that have settled in East Campus include Capital One, Safeco Insurance, Devry University, Tesoro Chemical and National Semiconductor.
Latest News |
Most Viewed Stories |
Most Emailed Stories |
