2015 Spokane Office/Medical Office Presented by Jon Jeffreys, SIOR Office and Medical Office Sales and Leasing NAI Black Commercial Real Estate

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•  Op#mism  spurs  increased  Office  occupancy.  

•  High  demand,  low  supply  -­‐  Office  sales  •  Medical  Office  at  all  #me  highs  in  vacancy.  

•  2015  will  be  a  break  out  year  for  new  companies  to  Spokane.    

Market  Summary  

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•  Office-­‐using  employment  expands  by  3%,                                  or  868,000  jobs  

 

•  Job  growth  vs  space  efficiencies    

•  Hoteling-­‐genera#onal  shiH    

•  Cubicle  square  footage                                                                                          decreases  

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Office  Leasing    

•  Seattle Vacancy: 15.1% to 13.7%

•  Portland Vacancy: 13.3% to 11.7%

•  San Francisco: 8.6% to 7.5%

•  Salt Lake City: 13.1% to 10.5%

 

Office  Leasing    

Vacancy  -­‐  2013  vs  2014  

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Office Leasing

•  Spokane County office vacancy improves

•  New job growth flat •  Spokane unemployment rate decreases

7.9% to 6.7% (misleading)

•  Rents flat / concessions decreasing

•  Development is minimal

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Medical Office

Notable New Leases •  64,000 sq. ft. Safeco Insurance - 24001 E.

Mission, Liberty Lake •  20,000 sq. ft. Spokane Eye Clinic - 16201 E.

Indiana, Spokane Valley •  15,913 sq. ft. Walgreen’s Billing Center -

10220 N. Nevada Street, Spokane •  44,000 sq. ft. Next IT - 12310 N. Mirabeau

Pkwy, Spokane Valley •  11,753 sq. ft. Regus – 601 W. 1st Ave., Spokane •  25,000 sq. ft. Pemco Insurance - 16201 E.

Indiana, Spokane Valley

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Office Sales

•  29 Sales in 2013 vs 25 Sales in 2014

•  Average Price/SF ≈ $72/SF ±

•  Actual Sales vs REO Sales / Distressed Properties

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2014  -­‐2015  Office  Building  Sales    

Ambassador’s  Group  Building  -­‐  2001  S.  Flint  Road          Sales  Price  -­‐  $9,010,000  

Purchaser  -­‐  Northwest  Farm  Credit  Services  

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133,459    SF  ±  

Sales  Price  -­‐  $3,350,000    Digi  Deal  Building  -­‐  5123  E.  Third  Avenue  

Purchaser  -­‐  School  Employees  Credit  Union  of  Spokane  

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20,250    SF  ±    

Sales  Price  -­‐  $4,250,000  Premier  Professional  Building  -­‐  15812  E.  Indiana  Avenue  

Purchaser  -­‐  CHAS  

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25,124    SF  ±  

Sales  Price:  $4,000,000  

Holly  Mason  Building:    157  S.  Howard  Street    

Purchaser:  Holly  Mason-­‐20,  LLC  

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127,960    SF  ±  

Sales  Price  -­‐  $2,300,000  Valley  Doctors  Building  -­‐  1512  N.  Vercler  

Purchaser  -­‐  CHAS    

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19,837    SF  ±    

2015  Outlook  

•  New  tenants  to  the  market  

•  Build-­‐to-­‐suit  opCons  become  viable  contenders  

•  Rents  stay  flat  as  vacancy  conCnues  to  decrease  

•  Large  blocks  of  space  become  less  available  

•  Spec  development  will  remain  non-­‐existent        

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Credit and Thanks

 §   Bureau  of  Labor  and  Sta#s#cs;    hdp://data.bls.gov/#meseries/LNS14000000  §   CBRE  Na#onal  Office  Overview  §   CBRE  Econometric  Advisors,  Q4  2014/CBRE  Marketview  Snapshot  §   Karen  Meek  -­‐  Valbridge  Property  Advisors  §   Marc  Mower,  Craig  Soehren,  and  Mike  Livingston  -­‐  Kiemle  &  Hagood  §   Jaime  Traeger  -­‐  PinecroH  §   Joe  Frank  -­‐  Greenstone  §   Wayne  Frost  -­‐  Frost  Consul#ng  §   Jack  Marr  -­‐  Worthy  Enterprises    §   Ron  White  -­‐  Unico  Proper#es  §   Ryan  Nipp  -­‐  Parkwood  Proper#es  §   Wendy  Smith  –  Greater  Spokane  Incorporated  (GSI)  §   Tom  Hix  –  NAI  Black  -­‐  Property  Management    §   Jeff  Johnson  -­‐  NAI  Black  –  Commercial  Real  Estate  

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Thank You

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