Market reports on Puget Sound commercial spaces compiled by GVA Kidder Mathews and CB Richard Ellis suggest a market in waiting.
“There are very few office buildings actively on the market. The office buildings that are on the market, most are new construction and vacant,” the GVA Kidder Mathews report for the quarter stated.
“Sellers are not lowering their prices, even though they should. Another segment that is slow are office condos. New construction condos are seeing little activity, due to the high priced construction of 2007 and 2008.”
Much of the market for office space is being tied to the future of Russell Investments and its pending decision to either staying in Tacoma or move to Seattle when its offices in downtown Tacoma expire, the report stated. The fact that Davita is also looking to move from its downtown Tacoma site further puts the market in a wait-and-see mode.
Puget Sound’s commercial real estate market experienced considerable change at the start of 2009, though much of it was expected due to declining economic conditions, the CB Richard Ellis report stated.
The vacancy rate for small commercial spaces is only about 6 percent, suggesting that small businesses are faring better than their larger siblings.