The South King County office real estate market was flat in the third quarter with only 661 square feet of net absorption, according to a report from independent commercial real estate firm Kidder Matthews.
The vacancy rate in South King — which Kidder Matthews defines as including Renton, Tukwila, Southcenter and SeaTac — moved up slightly and remains the highest in the Seattle-Tacoma metropolitan area.
This is not unusual at this point in the cycle, as the space in this market falls short when rates are low in closer-in submarkets. Also, a significant amount of the space in the market had been built for Boeing and, contrary to previous business cycles, Boeing’s leasing in Renton has not, and likely will not return.
The largest leases reported in the submarket this quarter were for 19,529 square feet in TIAA’s Creeksides at CenterPoint in Kent and 10,761 square feet in Triton Towers One in Renton. The next largest was only 4,600 square feet, framing the uphill battle to absorb the market’s vacancy.
The availability rate is also the highest in the region, inching up to 15.80 percent this quarter.
The 2013 year-to-date absorption is still the best in five years, remarkably better, for example, than in the East Seattle area market. Asking rental rates remain the lowest in the region and have increased over the past quarter.