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Few vacant office spaces to be found on Capitol Hill

While many office spaces remain dark in Seattle’s skyline buildings, Capitol Hill office spaces are nearly full. Only an estimated 7% of office spaces on the Hill are vacant, according to data from commercial real estate firm Kidder Mathews. The report tracks 225 office buildings on Capitol Hill. Since the end of 2012, office space vacancies have hovered between 6-7%.Picture 15

Rob Anderson of Kidder Mathews tells CHS that the greater Seattle area is probably closer to 10% to 12%. With the exception of South Lake Union and Fremont, Anderson said Capitol Hill is likely the most saturated office market in the region.

“6% vacancy rate for office space is very good,” said Anderson in an email to CHS. “This is probably in the top few sub-markets for vacancy rates in the Puget Sound.”

The 6% rate marks a stabilization from years past. During the prime recession years in 2009-2010, office space vacancies on the Hill shot up to 11%. Businesses started trickling back into offices through 2011, until the vacancy rate dipped below 3% in the beginning of 2012.

And those offices don’t come cheap. Anderson tells CHS that the average annual rent for offices on the Hill hover between $22/sq. ft. to around $28/sq. ft. (this excludes many expensive Class A medical offices).

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Rentable office space in Capitol Hill and First Hill (Image: Kidder Mathews)

There is around 6 million square feet of office space “rentable building area” in Capitol Hill/First Hill, which mostly includes office space. Downtown has roughly 33 million square feet. The only major new office building to come online in Capitol Hill in the last year was the ultra-green Bullitt Center. However several companies have recently expanded into new/old offices, including tech companies Add3 and Substantial most recently and new projects are starting construction or in various states of planning.

On the whole, office spaces in Capitol Hill are more expensive compared to those in broader western King County (which would include Bellevue). Gross rents in Capitol Hill, including medical, go for an annual average of $37/sq. ft., compared to western King County where average rents are $30/sq. ft.

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Alex Brennan
Alex Brennan
7 years ago

Bryan, 6 million square feet seems awfully high for office space on Capitol Hill. It’s hard to imagine that we have a fifth of the office space of downtown. Do you know what geography Kidder Mathews is using? Do those figures include retail space?

EarnestTeeBass
EarnestTeeBass
7 years ago

If there’s shadow inventory these numbers and charts don’t mean anything other than to raise real estate prices.

Bryan Rush
7 years ago

Interesting article, thanks for sharing this. ‘Seattle’ has about 56 million SF. That area encompasses Pioneer Square all the way north to the Northgate area. I agree that 6 Million square feet does sound high for Capital Hill. It appears the map also includes First Hill and part of the central district. Makes me wonder if the 6 Million square feet also encompasses large hospitals like Swedish and Virginia Mason. I can vouch for space being very tight here for office users, as I have mulitple office tenants looking for space in this area. Pickings are slim indeed.