Article originally published in PSBJ on September 11, 2020
Among Seattle-based companies that might move, a record number have their sights sets on the Eastside.
This is according to third-quarter tenant demand data from CBRE, which based on the number of full-time licensed brokers is the largest commercial real estate brokerage in the region.
The survey found 17% of tenants in the market for new space are focusing their searches on the Eastside. That's well above the seven-year average of 6% and comes in the wake of the Seattle City Council passing a corporate payroll tax on higher salaries are larger companies.
CBRE's initial analysis suggests most Seattle tenants currently seeking to relocate east would not be affected by the tax regardless of relocation. Though these tenants account for less than 200,000 square feet of space, their interest in moving east could portend a growing trend among occupiers, CBRE said in an email.
It added that "regional tenant migration shifts" have typically occurred during periods of new office construction as tenants favor higher-quality buildings.
"With 1 million square feet of uncommitted office space scheduled to deliver in Seattle in the next year, it remains to be seen how local policy and new construction will dictate future relocation choices," CBRE said.
The company's second quarter report said there was a total of nearly 4 million square feet under construction in Seattle with most of it downtown and in the South Lake Union neighborhood.
On the Eastside, 3.3 million square feet of new projects were going up, with nearly 60% of that in the Bellevue central business district. The Broderick Group brokerage reported that 96% of this space has been pre-leased.
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