Things are not tough all over in the new economy: There’s persistent reorganization as winners emerge and losers are shuffled to the fringes. You can see this played out in Seattle commercial real estate, where supply has been tightening all year.
The Seattle office space market has absorbed 797,000 square feet so far in 2011, reports Colliers International in their third quarter survey. Colliers tracks Class A, B and C office buildings that are 10,000 square feet and larger (medical buildings excepted). Seattle’s current vacancy rate is 16.53 percent, down from 18.13 percent a year ago. (The Eastside is “stagnant” at 14 percent–there are “16 properties with contiguous vacant spaces above 50,000 SF available.”)
In Seattle proper, larger tenants (namely Amazon and the Bill & Melinda Gates Foundation) have settled upon a build-your-own-campus strategy in South Lake Union, rather than continue to try to piece-meal square-footages. “This year alone, Amazon has moved into 816,000 SF of newly constructed office space and will move into an additional 326,000 SF office building scheduled to finish construction in Q2 2012,” notes Colliers. “Amazon is also rumored to be looking for an additional 300,000 SF in the near future.”
That leaves just two contiguous spaces larger than 200,000 square feet–ten over 100,000–in Seattle’s office market. Yet, volatility remains. Colliers mentions Dendreon’s big move into the Russell Investment Center (175,000 square feet), and of course Dendreon’s other headline news of late was: “Dendreon laying off 100 in Seattle, 400 elsewhere.”
Meanwhile, zombie properties farther from the core take chunks out of the living. As the Seattle Times‘ Eric Pryne reports, “Seattle developer Wright Runstad has defaulted on its loan on the PacMed building—Amazon.com’s former headquarters on Beacon Hill….” Neighbors were thrilled when a proposal to turn the building into a juvenile jail fell through, but without a major tenant, Wright Runstad is on the hook for both monthly debt service of about $181,000, says Pryne, and its monthly lease payment of $143,000.
The building itself is now appraised for about $11 million–close to half of what Wright Runstad owes in debt from their conversion of the building to office space.
A Seattle Times commenter proffers a modest proposal:
We’ve all thought it, I’m going to say it:
Zombie Fallout Shelter.
Tell me there hasn’t been at least one time when you were driving on I5 and saw this magnificent orange castle sitting on Beacon Hill and didn’t think to yourself, “If the undead are attacking Seattle, I want to hold out there.”
The PacMed building is a perfect fit. It’s strategic location allows for virtually 360 degree field of view. It’s open courtyard in the front is ideal for booby traps, barricades, and other devices to slow down the undead. The facility is certainly large enough to safely protect a large enough group of people that if needed, could repopulate the earth after Armageddon.