United States Skyline Review 2016-2
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The Seattle Skyline is defned as assets that have a signifcant impact due Occupied Direct vacant Sublease vacant to their size, quality of space or iconic status. Averaging more than 800,000 Seattle square feet, all buildings included offer Class A space and are situated in the most prominent, highly desired locations. Rent levels and/or value Alex Muir Joe Gowan JJ Shepard Future available Retail Parking, other use levels are the key inclusion; the current threshold requires that buildings Research Manager Vice President Managing Director consistently garner rents higher than $35.00 full-service gross and achieve the highest sales price in Seattle. | 2016 | JLL | 24 | 2016 | JLL SKYLINE 70 60 United States 50 40 30 20 10 One Union Russell Investments West 8th 1918 Eighth Century Square U.S. Bank Centre Two Union Square Square Center 1201 Third 999 Third Columbia Center Rainier Tower Safeco Plaza 1111 Third Fourth & Madison 901 Fifth The Mark Madison Centre RBA (s.f.) 497,798 668,333 661,640 943,575 1,132,554 659,168 886,000 1,128,575 983,600 1,680,937 538,529 902,423 631,040 845,533 540,589 766,779 746,000 Percent leased 97.7% 99.4% 97.8% 91.6% 94.1% 92.9% 97.3% 87.5% 97.4% 91.0% 95.9% 94.6% 81.8% 90.2% 87.2% 36.9% 5.4% Direct rent $46.00 $46.00 $37.00 $45.75 $45.50 $39.00 $49.50 $40.00 $36.00 $35.00 $33.75 $34.00 $36.50 $44.50 $38.00 $55.00 $46.50 Year built/ renovated 2009 2009 1986 1989/1994 1989 1981 2006 1988 1983/1994 1985/2005 1977 1969/2007 1980/2013 2002 1973/2007 2017 2017 Seattle Skyline leverage Skyline analysis Direct vacancy (%) vs. direct average asking rent ($ p.s.f.) 30.0% $50.00 Technology tenants are embracing the CBD and contributing Skyline direct average asking rent Skyline direct vacancy % to the decline of Skyline vacancy rates 11.0% 2.2% $45.00 2016 25.0% Top-tier space continues to dwindle with strong leasing activity coming from DIRECT VACANT 2015 NET ABSORPTION $40.00 (% OF INVENTORY) technology tenants. Companies like DocuSign, Groupon, Dropbox and Apple $35.00 have recently taken down large blocks of space in the CBD, helping push 20.0% Skyline vacancy down 13.6 percentage points since the recession. Although $30.00 rental rates have increased by 7.9 percent in the last two years, tenants have 2017 not hesitated to expand in the area primarily for the ease of access to public $43.42 7.3% 15.0% $25.00 transportation and the availability of state-of-the-art amenity packages. DIRECT AVERAGE ASKING 2015 ASKING RENT $20.00 There are currently over 2.2 million square feet under construction in the RENT ($ P.S.F.) GROWTH 10.0% Seattle CBD, with The Mark and Madison Centre adding 1.5 million square $15.00 feet of Trophy space to the Seattle Skyline set. Investment activity has been 2018 $10.00 prevalent in the last 12 months, with the transactions of the Columbia Center 5.0% and West 8th totaling nearly $1.1 billion. Signifcant sales activity is expected $5.00 to continue as several premier properties, such as Safeco Plaza and 901 5th, Tenant-favorable market 2,227,875 $1.1b are currently on the market. 0.0% $0.00 Neutral market S.F. UNDER 2015 & 2016 CONSTRUCTION SALES VOLUME ($) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 Landlord-favorable market 2016.