Examining the Eastside’s Commercial Real Estate Market
COVID-19 has resulted in numerous unprecedented global ramifications in various industries. With increased telework rates, certain mandates around construction, and more, we wondered how the Puget Sound’s commercial real estate market, in particular, has been affected. And how does its current state look compared to prepandemic times?
According to Colliers International’s Q2 Research & Forecast Report, which spans the beginning of April to the end of June, the Puget Sound market has “slowed” — in line with trends across the United States — amid COVID-19 uncertainty.
Leasing activity decreased in the area during the second quarter, according to Colliers, with a 180 percent reduction in signed deals for spaces greater than 10,000 square feet. The report notes that although this reduction is significant, most developers view the decrease as “more of a hiccup than something more terminal.”
Construction on the 7.7 million square feet of space underway in the Puget Sound region was either delayed or slowed by the coronavirus.
In the report, Colliers notes that 46,000 square feet of construction was delivered in the quarter. The pipeline, however, grew quarter to quarter by 700,000 square feet.
“The majority of this growth highlights the velocity and magnitude of eastward movement, with aggregate space under construction on the Eastside outpacing Seattle by a wide margin over the next half-decade,” the report said.
Although commercial real estate trends and findings as of the second quarter can’t decisively project how the rest of the year will play out, Colliers’ conclusion in its report was mostly optimistic.
“In all, Puget Sound’s tech-driven fundamentals have remained resilient in the face of uncertainty, and with a robust development pipeline should only have room to grow once the dust settles,” the report said.