First Quarter Real Report 2011
CURRENT STATE OF THE MARKET:
Though demand for office and high-tech space has remained stagnant over the last several quarters, general sentiments on the overall economy have turned positive. The Eastside market has yet to benefit from any major activity, but that will change as there are a number of deals close to being completed in the Bellevue CBD. Furthermore, there is a lack of large contiguous spaces available to any large user in the market, particularly the Bellevue CBD. With a lower level of supply, and no significant new construction expected for up to three (3) years, rents will finally reverse course, and we expect by the Fourth Quarter of this year that rents will finally start to grow again. While tenant activity overall is still sorely lacking on the Eastside, there is strong evidence to indicate a turn in the market.
• The overall Eastside Office Market vacancy rate remained the same, ending at 16.6%.
• Net absorption in the first quarter was positive, ending the quarter with 58,082 square feet of net absorption.
• Average asking rates decreased slightly, but it was the smallest drop in over 2 and a half years, ending the first quarter at $27.35/SF Full Service.