Q3 2022 Office Market Reports
November 3, 2022
Q3 Office Market Report Digest
As much of Downtown Bellevue begins to recover from the pandemic, our office market has had a challenging time recovering from its impact. We've pulled a list of Q3 Office Market Reports published by BDA Members and some of their key findings to understand where our current office market stands.
Key Takeaway: Despite increasing interest rates, high inflation and the ambivalent recession, Washington employers added more than 30,000 new jobs during Q3. Signs of a healthy workforce were also noted by CBRE’s annual Scoring Tech Talent Report for 2022, which ranked Seattle’s tech labor market as #2 in the nation.
Key Takeaway: The Eastside experienced a significant reduction in leasing activity this quarter. Aside from Meta’s 200,000 square foot lease at the Park at Willow Ridge, the largest new lease signed was 61,500 square feet. While relatively low when compared to Seattle, the Eastside’s overall vacancy increased to 10.5%, up from 9.4%. Sublease availabilities composed a large chunk of this space, increasing from 3.1% to 4.1% of the market.
Cushman & Wakefield
Key Takeaway: The Puget Sound region is close to a full recovery from the pandemic. With near record-high rents and record low vacancy in early 2020, the region was better positioned to withstand an economic shock before this recession than during the Great Financial Crisis. Rents are forecasted to stay on the rise heading into the final quarter with the continued growth in leasing activity and new construction.
Key Takeaway: Larger completed deals returned in Q3, led by two deals over 100,000 s.f. signed in the Southend. Overall availability was up 170 basis points from Q2 to a record high of 19.2% with both direct and sublease availability increasing. High-quality spaces continued to secure the lion’s share of leasing, with average Class A asking rents currently at $55.72 p.s.f. full-service, up 4.3% over the past 12 months.
Key Takeaway: Through the 3rd quarter of 2022, the regional office data shows another surge in vacancy going from 10.19% last quarter to 10.43% currently, an increase of 24 bps. The regional office market has now seen a rise in vacancy for 9 of the last 11 quarters.
Key Takeaway: The Puget Sound office market remained in a holding pattern for the third quarter of 2022, amid economic hesitancy and uncertainty surrounding return-to-work plans. Overall vacancy remained nearly flat during the third quarter of 2022 at 11.2%, with direct vacancy at 10.4%. Overall net absorption for the Puget Sound office market finished the quarter at negative 235,183 square feet.