Puget Sound's Northend Office Market Remains Tight

EVERETT, WA-The Northend office market is the place to be right now, according to the latest data on the submarket, which contains 125 buildings hosting approximately 4.95 million sf of office space.

The Northend market lies north of Lake Union and the University of Washington, and includes Northgate, Lynwood, Mountlake Terrace and Everett. It spans two counties, King and Snohomish, and is predominantly concentrated around three major shopping centers: Northgate, Alderwood and Everett malls.

It’s a winning strategy. The last quarter’s report from C.B. Richard Ellis places the Northend vacancy rate at a mere 4.57%, the lowest of Seattle’s submarkets. The average rent for class A space in the market is running $25.07 per sf, with the buildings closest to Seattle generally asking the highest rates.

The future of the Northend office market lies in Snohomish County markets like Everett. Historically an industrial city, Everett continues to hold a small ratio of office properties relative to its 80,000 residents. OfficeSpace.com says Everett is presently home to 26 office buildings totaling approximately 1.25 million sf of space, several of which are now on the market.

The 52,100-sf Everett Mall Office Building is being offered at $6.2 million. Listing agent, Darrell Okada of Puget Sound Properties, says the asking price is below replacement cost. However, specifics on the property were not immediately available.

Randall Peterson of Westlake Associates in Seattle is listing the Chaffe Building, remodeled in 1986, for $2.8 million. This three-story office building holds 24,000 sf. According to Peterson, the asking price translates to a cap rate of 8%.

Yet to be constructed, the 128th Street Professional Center (at the corner of 128th Street and Fourth Avenue West) is proposed to contain 39,000 sf of office space, in three stories, on a 79,715-sf lot. Derek Heed of the Bellevue office of Colliers International says the asking price for this Class A property is $5.1 million. Pre-leasing efforts are asking $16 per sf.