market update - washington bankers association h-min.pdf · 2018-03-14 · overall office vacancy...
TRANSCRIPT
2018 MARKET UPDATE
PRESENTED TO
MARCH 14, 2018
PRESENTED BY
BRIAN HATCHERKidder MathewsExecutive Vice President, Brokerage
EASTSIDE
SEATTLE
2017 MARKET HIGHLIGHTS
SEATTLE EASTSIDE
Total Market Size 78,771,784 s.f. 49,901,562 s.f.
Year-End Vacancy Rate 5.17% 4.84%
Net Absorption - SF 1,532,346 s.f. 1,232,120 s.f.
Net Absorption - SF/New Job 74.73 s.f. 60.09 s.f.
Under Construction 6,993,250 s.f. 403,000 s.f.
Sales Volume Over (>$10M) $2,048,723,183 $1,039,496,253
Seattle MSA Job Growth Rate of Growth Unemployment Rate
20,506
1.31%
3.90%
Strong rent growth in all markets is projected as vacancy rates are at all-time lows
There is 7.4 million sf currently under construction, with over 70% pre-leased
The Urban Land Institute (ULI) ranks Seattle as the No. 1 market in the country for investment in 2018
Seattle/Eastside Office Markets 2017 Year-End Review
AMAZON
Year-End Occupancy 10,940,500 sf
% of Seattle Market 13.89%
2017 Absorption 884,000 sf
% of Total Seattle Absorption 57.69%
Year-End Seattle Employees 41,000 (est)
MICROSOFT
Year-End Occupancy 14,735,144 sf
% of Eastside Market 29.53%
Year-End Puget Sound Employees 47,121
2017 Greater Seattle Office Sales10-YEAR HISTORICAL YEAR-END OFFICE SALES > $10M
10-YEAR TOTALS
Total Sales Volume $24.212B
Total # Transactions 315
Average Transaction Value $76.14M
Average / Year $2.42B
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SEATTLE EMPLOYMENT GROWTH - ABSORPTION RELATIONS
YEAR JOB TOTAL GROWTH RATE CHANGE OFFICE
ABSORPTIONSF / NEW
JOB
2002 1,231,931 -0.32% (3,968) 77,415 (19.51)
2003 1,256,474 1.99% 24,543 1,089,853 44.41
2004 1,283,133 2.12% 26,659 732,065 27.46
2005 1,324,824 3.25% 41,691 637,448 15.29
2006 1,364,194 2.97% 39,370 2,831,005 71.91
2007 1,396,665 2.38% 32,471 1,198,685 36.92
2008 1,390,932 -0.41% (5,733) 867,126 (151.25)
2009 1,353,126 -2.72% (37,806) (1,271,930) 33.64
2010 1,362,287 0.68% 9,161 1,607,678 175.49
2011 1,390,967 2.11% 28,680 1,910,587 66.62
2012 1,430,711 2.86% 39,744 1,724,942 43.40
2013 1,459,011 1.98% 28,300 1,131,056 39.97
2014 1,481,297 1.53% 22,286 1,293,126 58.02
2015 1,505,578 1.64% 24,281 3,924,292 161.62
2016 1,565,330 5.67% 59,752 3,771,384 63.12
2017 (P) 1,585,836 1.31% 20,506 1,532,346 74.73
2018 1,633,411 3.00% 47,575 3,253,495 68.39
2019 1,682,413 3.00% 49,002 3,351,100 68.39
2020 1,732,886 3.00% 50,472 3,451,633 68.39
2003-2007 Last Recovery 13.11% 164,734 6,489,056 39.39
2011-2017 Current Recovery 16.07% 223,549 15,287,733 68.39
Employment figures from Seattle MSA (Seattle-Bellevue-Everett) (P) Projected annual
Seattle Office Market2017 saw an increase in net absorption added per new job at nearly 75 sf
2018 will produce much stronger net absorption, with over 1.8 million square feet of pre-committed new construction delivering
An upswing in job creation is expected, based on existing demand in excess of 90,000 of current openings in greater Seattle
SEATTLE SUBMARKET SUMMARY
Overall office vacancy rates declined 40 basis points in 2017 to end the year at near historic lows of 5.17%. Very strong net
absorption was highlighted by South Lake Union, with over 817,000 square feet, Seattle CBD, and the Financial District.
Average asking rates were up as much as 10% in several sub-markets.
The table below summarizes the 2017 year-end status of each Seattle submarket:
AVAILABILITY AND VACANCY ANALYSIS - SEATTLE OFFICE MARKET YEAR-END 2017
SubmarketExisting Buildings
Existing Rentable Building Area
Total SF Vacant (Direct /Sublet)
Vacancy Rate
Total SF Available
Availability Rate %
YTD Net Absorption
Average Asking Rate
Class A Average Asking Rate
Projected Rent Growth 2018
# Bldgs w/ Contiguous Spaces 50K-100K SF
# Bldgs w/ Contiguous Spaces 100K SF+
Market Driving Job Sectors
Influential Companies
Ballard/U District 100 4,544,506 183,425 4.04% 208,071 4.58% 48,962 $35.00/FS $40.00/FS 3.00% 0 0 Tech/Maritime University of Washington
Belltown/Denny Regrade
85 8,574,469 320,680 3.74% 476,826 5.56% (45,030) $34.00/FS $40.00/FS 3.00% 0 0 Tech/Services Gates Foundation
Capitol Hill/Central District
98 5,173,233 96,015 1.86% 100,504 1.94% (42,654) $35.00/FS $42.00/FS 5.00% 0 0 Medical Swedish
Lake Union 131 12,917,383 369,150 2.86% 681,631 5.28% 817,224 $41.00/FS $48.00/FS 7.00% 1 0 Tech/Life Sc. Amazon, Google, Facebook
Pioneer Square/Waterfront
96 6,674,376 370,418 5.55% 571,241 8.56% (38,190) $34.00/FS $40.00/FS 7.00% 1 0 Tech/Services Wayerhaeuser, Saltchuk
Queen Anne/Magnolia
97 5,463,623 129,269 2.37% 767,745 14.05% 101,135 $33.00/FS $38.00/FS 3.00% 0 4 Tech/Services Expedia, Big Fish
South Seattle 94 4,244,775 263,524 6.21% 376,109 8.86% 165,459 $33.00/FS $38.00/FS 0.00% 1 1 Manufacturing Starbucks
Seattle CBD 61 14,396,840 771,231 5.36% 1,298,566 9.02% 353,351 $41.00/FS $50.00/FS 5.00% 4 0 Financial/Serv F5
Seattle Financial District
52 16,782,579 1,566,540 9.33% 2,413,199 14.38% 172,089 $40.00/FS $48.00/FS 3.00% 3 3 Financial/Legal
Total 814 78,771,784 4,070,252 5.17% 6,893,892 8.75% 1,532,346 10 8
* All buildings 10K SF+, not including properties under construction. Availability includes any space that is available, regardless of whether space is vacant, available for sublease, or available at a future date.
Photos from top to bottom The Atrium, The Mark, Troy Block North
SEATTLE PROPOSED AND RECENTLY COMPLETED OFFICE BUILDINGS
Project Name Address Project Proponent New SF % Preleased SF AvailableScheduled Completion
Building Status
Year 2017
Troy Block North Lake Union Urban Renaissance Group/ USAA 422,000 100.0% 0 Q1 2017 Completed
Third & Harrison Queen Anne/Magnolia Martin Selig Real Estate 185,000 100.0% 0 Q1 2017 Completed
Tilt49 Seattle CBD Urban Renaissance Group 291,000 100.0% 0 Q2 2017 Completed
400 Dexter Lake Union Alexandria Real Estate 289,000 96.5% 10,237 Q2 2017 Completed
450 Alaskan Pioneer Square/ Waterfront Hudson Pacific Properties 167,000 72.2% 46,469 Q3 2017 Completed
744 N 34th Street Ballard/U District CoU LLC 123,500 100.0% 0 Q3 2017 Completed
Madison Centre (505 Madison) Seattle CBD Schnitzer West 764,000 30.4% 532,078 Q4 2017 Completed
F5 Tower (The Mark) Seattle CBD Stockbridge/ Daniel's Development 528,000 100.0% 0 Q4 2017 Completed
9th & Thomas Lake Union Sellen 157,500 100.0% 0 Q4 2017 Completed
SUBTOTAL 2,927,000 20.1% 588,784
Year 2018 and Beyond
Hawk Tower Pioneer Square/ Waterfront American Life/ Daniel's Development 209,000 64.5% 74,250 Q2 2018 Under Constr.
503 Westlake Lake Union SE Grainger Development Group 37,000 49.7% 18,600 Q2 2018 Under Constr.
Maritime Building Pioneer Square/ Waterfront Beacon Capital 187,000 100.0% 0 Q2 2018 Under Constr.
Arbor Blocks East Lake Union Vulcan 196,000 100.0% 0 Q4 2018 Under Constr.
Arbor Blocks West Lake Union Vulcan 193,000 100.0% 0 Q4 2018 Under Constr.
Amazon Tower Phase III (Rufus 2.2) Belltown/Denny Regrade Amazon 1,100,000 100.0% 0 Q1 2019 Under Constr.
333 Dexter Lake Union Kilroy Realty 630,000 0.0% 630,000 Q1 2019 Under Constr.
The Atrium (1818 Fairview) Lake Union Alexandria Real Estate 212,000 0.0% 212,000 Q1 2019 Under Constr.
2+U (2nd & University) Seattle CBD Skanska 665,000 0.0% 665,000 Q1 2019 Under Constr.
1525 11th Avenue Capitol Hill/Central District Legacy Commercial 75,500 0.0% 75,500 Q2 2019 Under Constr.
Building Cure (Stewart & Terry) Seattle CBD Seattle Children's Hospital 540,000 100.0% 0 Q2 2019 Under Constr.
15th & Market Ballard/U District Martin Selig Real Estate 204,000 59.8% 82,000 Q3 2019 Under Constr.
Block 21 (Hurricane Block) Belltown/Denny Regrade Amazon 835,000 100.0% 0 Q4 2019 Under Constr.
Lakefront Blocks Lake Union Vulcan 607,000 100.0% 0 Q1 2019 Under Constr.
Rainier Square Block Seattle CBD UW/ Wright Runstad & Co. 750,000 100.0% 0 Q2 2020 Under Constr.
Third & Lenora Belltown/Denny Regrade Martin Selig Real Estate 552,750 100.0% 0 Q2 2020 Under Constr.
Watershed Ballard/U District CoU LLC 57,655 0.0% 57,655 TBD Proposed
Ballard Blocks II Ballard/U District Principal/ KG 267,000 0.0% 267,000 TBD Proposed
Block 18 Belltown/Denny Regrade Amazon 405,000 100.0% 0 TBD Proposed
515 Minor Capitol Hill/Central District HR Acquisition I Corp. 136,000 0.0% 136,000 TBD Proposed
111 Westlake Lake Union Vulcan 420,000 0.0% 420,000 TBD Proposed
520 Westlake (Block 38) Lake Union Vulcan 322,000 0.0% 322,000 TBD Proposed
1150 Eastlake Lake Union Alexandria Real Estate 280,000 0.0% 280,000 TBD Proposed
Yale & Thomas Expansion Lake Union Unico Properties 200,000 100.0% 0 TBD Proposed
400 Westlake Lake Union Martin Selig Real Estate 190,500 0.0% 190,500 TBD Proposed
Dexter Station Expansion Lake Union Tristar Capital/ RFR Realty 165,000 0.0% 165,000 TBD Proposed
1165 Eastlake Lake Union Alexandria Real Estate 134,250 0.0% 134,250 TBD Proposed
S: A-F (1001 6th Ave S) Pioneer Square/ Waterfront Urban Visions 1,200,000 0.0% 1,200,000 TBD Proposed
Amgen Campus (Expedia HQ) Queen Anne/Magnolia Expedia 600,000 100.0% 0 TBD Proposed
831 Airport Way S Seattle Urban Visions 155,000 0.0% 155,000 TBD Proposed
The Net Seattle CBD Urban Visions 675,000 0.0% 675,000 TBD Proposed
Federal Reserve Redevelopment Seattle CBD Martin Selig Real Estate 540,000 0.0% 540,000 TBD Proposed
SUB TOTAL 12,740,655 50.6% 6,299,755
54.9% UNDER CONSTRUCTION 6,993,250 74.9% 1,757,350
45.1% PROPOSED 5,747,405 21.0% 4,542,405
EASTSIDE EMPLOYMENT GROWTH - ABSORPTION RELATIONS
YEAR JOB TOTAL GROWTH RATE CHANGE OFFICE
ABSORPTIONSF / NEW
JOB
2002 1,231,931 -0.32% (3,968) 40,412 (10.18)
2003 1,256,474 1.99% 24,543 227,746 9.28
2004 1,283,133 2.12% 26,659 657,337 24.66
2005 1,324,824 3.25% 41,691 1,243,985 29.84
2006 1,364,194 2.97% 39,370 579,668 14.72
2007 1,396,665 2.38% 32,471 782,520 24.10
2008 1,390,932 -0.41% (5,733) 411,144 (71.72)
2009 1,353,126 -2.72% (37,806) (93,287) 2.47
2010 1,362,287 0.68% 9,161 285,308 31.14
2011 1,390,967 2.11% 28,680 888,634 30.98
2012 1,430,711 2.86% 39,744 601,613 15.14
2013 1,460,104 2.05% 29,393 (77,762) (2.65)
2014 1,481,297 1.45% 21,193 827,101 39.03
2015 1,505,578 1.64% 24,281 109,748 4.52
2016 1,565,330 5.67% 59,752 546,701 9.15
2017 (P) 1,585,836 1.31% 20,506 1,232,120 60.09
2018 1,633,411 3.00% 47,575 878,543 18.47
2019 1,682,413 3.00% 49,002 904,899 18.47
2020 1,732,886 3.00% 50,472 932,046 18.47
2003-2007 Last Recovery 13.11% 164,734 3,491,256 21.19
2011-2017 Current Recovery 16.07% 223,549 4,128,155 18.47
Employment figures from Seattle MSA (Seattle-Bellevue-Everett) (P) Projected annual
The Eastside market overachieved relative to historical models with 60.09 sf of net absorption per new job
Overall net absorption during the year was more than double the historic annual average of roughly 550,00 sf
In 2018 the strength of the market will be driven by leasing of second generation space left vacant by recent expansions/relocations
Eastside Office Market
AVAILABILITY AND VACANCY ANALYSIS - EASTSIDE OFFICE MARKET YEAR-END 2017
SubmarketExisting Buildings
Existing Rentable Building Area
Total SF Vacant (Direct /Sublet)
Vacancy Rate
Total SF Available
Availability Rate %
YTD Net Absorption
Average Asking Rate
Class A Average Asking Rate
Projected Rent Growth 2018
# Bldgs w/ Contiguous Spaces 50K-100K SF
# Bldgs w/ Contiguous Spaces 100K SF+
Market Driving Job Sectors
Influential Companies
North Creek/ Canyon Park
52 3,779,625 417,354 11.04% 712,982 18.86% (87,114) $17.00/NNN $20.00/NNN 0.00% 4 0 Life Sc./ Telecom
Seattle Genetics, PSE
Kirkland CBD 56 2,280,064 84,943 3.73% 127,819 5.61% 16,127 $26.00/NNN $32.00/NNN 5.00% 0 0 Tech/Services Google, Tableau
Totem Lake 12 526,190 27,042 5.14% 80,458 15.29% 39,580 $18.50/NNN $20.00/NNN 7.00% 0 0 Eng./Medical Evergreen Hospital
Redmond (Excluding Microsoft)
71 4,007,620 260,109 6.49% 559,878 13.97% (261,574) $19.50/NNN $22.00/NNN 10.00% 1 0 - -
Redmond (Including Microsoft)
97 7,157,109 260,109 3.63% 559,878 7.82% (261,574) - - - - - Tech/Services Microsoft
520 Corridor (Excluding Microsoft)
89 3,365,657 205,749 6.11% 386,746 11.49% 24,135 $25.00/NNN $26.00/NNN 5.00% 1 0 - -
520 Corridor (Including Microsoft)
135 9,667,476 205,749 2.13% 386,746 4.00% 24,135 - - - - - Tech/Services Microsoft, Nintendo
Suburban Bellevue 195 6,041,383 280,504 4.64% 406,148 6.72% 152,262 $24.00/NNN $26.00/NNN 5.00% 1 0 Services University of Washington
I-90 Corridor 66 6,153,181 359,767 5.85% 957,547 15.56% 88,551 $24.00/NNN $26.00/NNN 10.00% 3 1 Tech/ Telecom T-Mobile, Verizon
Coal Creek Issaquah 47 2,265,120 301,775 13.32% 324,246 14.31% 41,647 $20.00/NNN $25.00/NNN 0.00% 2 1 Tech/Services Costco
E. King County 36 859,624 14,288 1.66% 18,693 2.17% 43,434 $20.00/NNN $24.00/NNN 0.00% 0 0 Services Sanmar
Mercer Island 18 547,753 9,068 1.66% 9,717 1.77% 31,383 $24.00/NNN $26.00/NNN 0.00% 0 0 Services Farmer’s
Bellevue CBD 58 10,624,037 453,743 4.27% 1,108,789 10.44% 1,143,689 $36.00/NNN $45.00/NNN 10.00% 1 2 Tech/Services Microsoft, Concur, Amazon
Total (Including Microsoft)
772 49,901,562 2,414,342 4.84% 4,693,023 9.40% 1,232,120 13 4
* All buildings 10K SF+, not including properties under construction. Availability includes any space that is available, regardless of whether space is vacant, available for sublease, or available at a future date.
EASTSIDE SUBMARKET SUMMARY
Overall office vacancy rates decreased over 40 basis points during 2017 to end the year at 4.84%, which is the first sub 5.0%
rate since 2000. The strongest sub-markets for net absorption included the Bellevue CBD, Suburban Bellevue, and the I-90
Corridor. These sub-markets are also showed substantial gains of 5-10% in asking rates over the past year.
EASTSIDE PROPOSED AND RECENTLY COMPLETED OFFICE BUILDINGS
Project Name Address Project Proponent New SF % Preleased SF Available Scheduled Completion
Building Status
Year 2017
Lincoln Square II Bellevue CBD Kemper Development 720,000 100.0% 0 Q3 2017 Complete
The Spring District - GIX Suburban Bellevue Wright Runstad 100,000 100.0% 0 Q3 2017 Complete
SUBTOTAL 820,000 0.0% 0
Year 2017 and Beyond
Kirkland Urban North Kirkland CBD Prudential/ Talon 203,000 46.8% 108,000 Q4 2018 Under Constr.
Kirkland Urban Central Kirkland CBD Prudential/ Talon 200,000 46.0% 108,000 Q1 2019 Under Constr.
600 Bellevue Bellevue CBD Equity Office/ Urban Renaissance 800,000 0.0% 800,000 TBD Proposed
Summit Phase III Bellevue CBD Hines 330,500 0.0% 330,500 TBD Proposed
305 Tower Bellevue CBD Fana Group 210,000 0.0% 210,000 TBD Proposed
Kirkland Urban South Kirkland CBD Prudential/ Talon 202,000 0.0% 202,000 TBD Proposed
Lake Street Place Kirkland CBD McLeod Development 110,000 0.0% 110,000 TBD Proposed
5501 Lakeview Kirkland BMGI 45,750 0.0% 45,750 TBD Proposed
Lincoln Executive Center Expansion I-90 Corridor Miller Global/ Urban Renaissance 500,000 0.0% 500,000 TBD Proposed
The Spring District - REI HQ Suburban Bellevue Wright Runstad 750,000 100.0% 0 TBD Proposed
Burnstead (TOD) Suburban Bellevue Burnstead Development 400,000 0.0% 400,000 TBD Proposed
The Spring District - Block 16 Suburban Bellevue Wright Runstad 324,000 0.0% 324,000 TBD Proposed
Esterra Park Four Suburban Bellevue Capstone 230,000 0.0% 230,000 TBD Proposed
Esterra Park Five Suburban Bellevue Capstone 225,000 0.0% 225,000 TBD Proposed
Esterra Park Three Suburban Bellevue Capstone 223,000 0.0% 223,000 TBD Proposed
Esterra Park Two Suburban Bellevue Capstone 180,000 0.0% 180,000 TBD Proposed
Esterra Park One Suburban Bellevue Capstone 172,000 0.0% 172,000 TBD Proposed
The Spring District - Block 24 Suburban Bellevue Wright Runstad 167,000 0.0% 167,000 TBD Proposed
Woodlands Technology Campus II Bothell/Kenmore TIAA-CREF 647,000 0.0% 647,000 TBD Proposed
Canyon Park XVIII Bothell/Kenmore Martin Development 126,750 0.0% 126,750 TBD Proposed
North Creek Office Plaza Bothell/Kenmore MBA North Creek Plaza 101,000 0.0% 101,000 TBD Proposed
SUBTOTAL 6,147,000 15.2% 5,210,000
6.6% UNDER CONSTRUCTION 403,000 46.4% 216,000
93.4% PROPOSED 5,744,000 13.1% 4,994,000
11
Mercer St
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LAKE UNION
Lenora St
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Bell StBlanchard
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ELLIOTT BAY
SEATTLE DEVELOPMENT PIPELINE
PROPERTY TYPES
Office
Residential
Mixed-Use
Biotech/Medical
Retail
Hotel
Convention Center
AMAZON
Amazon - Owned
Amazon - Leased
Amazon - In-Development
Amazon - Option to Buy (or right of first offer)
PROJECT STATUS
Completed Projects
Under Construction
Planned Projects
MEYDENBAUERBAY
NE
8th St
NE
10th St
NE 12th St
NE
6th St
NE
4th St
Mai
n S
t
112th Ave NE
108th Ave NE
110th Ave NE
Bellevue Way NE 104th Ave NE
100th Ave NE
BELLEVUE DEVELOPMENT PIPELINE
PROJECT TYPE
Office
Residential
Residential Mixed-Use
Retail
Hotel
Performance Hall
Convention Center
Transportation
PROJECT STATUS
Under Construction
Planned Projects
Completed
Seattle vs. San Francisco vs. PortlandCROSS-MARKET TENANTS
Given the recent migration of many tech related
companies to Seattle and Portland from the
San Francisco Bay Area, the comparison of the
three office markets has never been more relevant.
Following are the basic market metrics for all three
markets and a representative list of the companies
that now have offices in multi-market locations.
MARKET COMPARISON
SEATTLE/ EASTSIDE
SAN FRANCISCO/ SILICON VALLEY PORTLAND
Market Size 128,673,346 sf 296,075,471 sf 90,638,830 sf
2017 YE Vacancy 5.01% 8.27% 6.50%
2017 Net Absorption 2,764,466 7,082,153 532,299
YE Total Employment 1,585,836 2,253,300 973,800
2017 Job Growth 20,506 40,600 22,300
2017 Job Growth Rate 1.31% 1.80% 2.34%
2017 YE Unemployment Rate 3.90% 2.45% 3.90%
High Water Mark - Class A $60.00 $110-115 $46.50
Average Class A Rates $45-$48 $46-$75 $32-$40
2017 Sale Transactions > $10M 3,141,469,436 $4,232,000,000 1,229,709,800
Occupancy Cost Impact
- 150sf/employee x average - Class A rate/average employee salary ($130k/Seattle; $150k/SF; $115k/Portland)
5.37% 6.05% 4.70%
SEATTLE VS. SAN FRANCISCO VS. PORTLAND OFFICE MARKET COMPARISON
20,5062017 Job Growth
1.31%2017 Unemployment Rate
$45-$482017 Average Class A Rates/SF Fully Serviced
5.37%Occupancy Cost Impact
40,6002017 Job Growth
1.80%2017 Unemployment Rate
$46-$752017 Average Class A Rates/SF Fully Serviced
6.05%Occupancy Cost Impact
SEATTLE SAN FRANCISCO
22,3002017 Job Growth
2.34%2017 Unemployment Rate
$32-$402017 Average Class A Rates/SF Fully Serviced
4.70%Occupancy Cost Impact
PORTLAND
Seattle & Eastside Major Lease Transactions
SEATTLE LEASE TRANSACTIONS
TENANT BUILDINGSQUARE
FOOTAGE
BALLARD/ U DISTRICT
WeWork 15th & Market 122,000
BELLTOWN/ DENNY REGRADE
Industrious 6th & Lenora 122,000
Snap Inc. Market Place Tower 28,750
LAKE UNION
Netmotion Wireless Westlake Union Center 24,500
Privateer Holdings 2701 Eastlake 27,000
Capital One 501 Eastlake 39,500
Delta Dental 400 Fairview 61,000
Facebook 1101 Westlake 150,500
98point6 Columbia Center 23,000
SEATTLE CBD
ZillowRussell Investments Center
38,750
AirBNB 8th & Olive 42,750
Indeed Russell Investments Center 44,750
Coupbang 8th & Olive 47,000
University of Washington Fifth & Bell 50,500
King County Defenders Dexter Horton Building 88,000
OracleRussell Investments Center
100,000
Amazon Macy's Building 475,000
F5 Networks F5 Tower (The Mark) 515,000
Amazon Rainier Tower Development 750,000
EASTSIDE LEASE TRANSACTIONS
TENANT BUILDINGSQUARE
FOOTAGE
BELLEVUE CBD
Expedia Skyline Tower 112,250
Salesforce (Expansion) 929 Tower 77,500
Wells Fargo Civca Office Commons 50,000
Clark Nuber Skyline Tower 46,750
HDR Engineering 929 Tower 42,500
XEVO Plaza Center 39,500
Sony/ SuckerPunch 929 Tower 36,250
Chempoint One Bellevue Center 35,500
HUB International North Creek Place 30,000
Sterling Talent Solutions 929 Tower 26,250
I-90 CORRIDOR
Sinclair Broadcast Group I-90 Corporate Center 32,500
NORTH CREEK/ CANYON PARK
EKOS Parklands North Creek 36,000
REDMOND
Golder Associates Millennium Corporate 37,000
Clarisonic Bear Creek Corporate Center 26,000
GeoEngineers Bear Creek Corporate Center 25,500
SUBURBAN BELLEVUE
OfferUp Mercer Pointe 71,500
K2 Bellefield Office Park 31,000
REVENUE AND HEADCOUNT (6/30/17)
Period Ending
Employee Count
Revenue (Billions)
12 Month Growth
Net Income (Billions)
12 Month Growth
6/30/2017 124,293 $89.50 4.9% $21.20 26.3%6/30/2016 114,074 $85.32 -8.8% $16.79 37.7%6/30/2015 117,354 $93.58 7.8% $12.19 -44.8%6/30/2014 128,076 $86.83 12.3% $22.07 -0.2%6/30/2013 99,139 $77.31 4.1% $22.12 -6.3%6/30/2012 94,290 $74.30 6.2% $23.60 1.9%6/30/2011 90,412 $69.94 11.9% $23.15 23.4%6/30/2010 88,596 $62.48 6.9% $18.76 28.8%6/30/2009 92,736 $58.44 -3.3% $14.57 -17.6%6/30/2008 91,259 $60.42 18.2% $17.68 25.7%6/30/2007 78,565 $51.12 15.4% $14.07 11.7%6/30/2006 71,172 $44.28 11.3% $12.60 2.9%6/30/2005 61,000 $39.79 $12.25
Microsoft Impact on the Region and the Eastside
Research & Development Expenditure - Fiscal Year 2017 ................$13.04B Total Current Assets - Ending Fiscal Year 2017 .................................$24.10B
Employment Information - 9/30/2017
Worldwide ............................................................................................ 124,293 U.S. ......................................................................................................... 74,191 Puget Sound .......................................................................................... 47,212
Real Estate Summary - Total Portfolio
Puget Sound Region .................................................................. 14,735,144 sf Other U.S. ................................................................................... 11,387,652 sf International ................................................................................ 19,951,742 sf
TOTAL 46,074,538 sf
Puget Sound Real Estate - 14,735,144 sf
LEASED Seattle ......................................................................................................... 0 sf Eastside ........................................................................................ 4,540,930 sf
TOTAL 4,540,930 sfOWNED Seattle ......................................................................................................... 0 sf Eastside ...................................................................................... 10,194,214 sf
TOTAL 10,194,214 sf
Eastside Impact on Market Statistics
% of Total Market Incl Leased & Owned .............................................29.53% % of Total Market Leased Space Only ..................................................9.10% Market Vacancy Excl all Microsoft Leased Buildings ...........................5.32% Market Vacancy Excl all Microsoft Owned Buildings ...........................6.08% Market Vacancy Excl all Microsoft Leased & Owned Buildings ...........6.87%
Economic Impacts• Microsoft has spawned over 250 companies in the Puget Sound Region
• The company has an estimated 3.4 implied employment multiplier, which means it produces over 153K indirect jobs in the region
• Microsoft is estimated to have created over 10K millionaires residing in the Seattle MSA
150K
120K
90K
60K
6/30/08 6/30/09 6/30/10 6/30/11 6/30/12 6/30/13 6/30/14 6/30/15 6/30/16 6/30/17
MICROSOFT EMPLOYMENT FIGURES
Amazon Impact on the Region
Revenue - Q3 2016 ............. $43,744B 12-Month Change .................... 33.7%
Employment Information
Worldwide ..............................541,900 Puget Sound ................... 41,000 (est.)
Amazon Real Estate Summary - Total PortfolioEconomic Impacts
• Since 2008, Amazon has grown from roughly 800K sf to over 9M sf in the Seattle office market
• Employment totals are above 35K
• Since its inception, Amazon has acquired 29 companies, like Zappos.com, and invested in various others
600K
400K
200K
0
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
AMAZON EMPLOYMENT FIGURESREVENUE AND HEADCOUNT (9/30/17)
Period Ending
Employee Count
Revenue (Billions)
12 Month Growth
Net Income (Billions)
12 Month Growth
Q3 2017 541,900 $43,744 33.7% $256 1.6%
Q2 2017 382,400 $37,955 24.8% $197 -77.0%
Q1 2017 351,000 $35,714 22.6% $724 41.1%
Q4 2016 341,400 $43,741 22.4% $749 55.4%
Q3 2016 306,800 $32,714 29.0% $252 219.0%
Q2 2016 268,900 $30,404 31.1% $857 831.5%
Q1 2016 245,200 $29,128 28.2% $513 -1000.0%
Q4 2015 230,800 $35,747 21.9% $482 125.2%
Q3 2015 222,400 $25,358 23.2% $79 118.1%
Q2 2015 183,100 $23,185 19.9% $92 -173.0%
SF Owned 4,054,250Owned - Under Construction 1,100,000Owned - Proposed 1,240,000Leased 6,886,250Leased - Under Construction 722,000Leased - Proposed 200,000
Total 14,202,500 sf
Total 10,940,500 sf
Potential Employee Base (140/SF/Emp) 101,446
Total Owned % of Total
6,394,250 45.8%
Total Leased % of Total
7,808,250 55.0%
