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News release

SEATTLE, WA

Seattle’s Appeal for Tech Tenants Continues Despite Short Term Space Crunch

Much needed office space to be delivered over next 24 months will provide vital large blocks for hungry tech firms


SEATTLE, WASHINGTON – November 17, 2015 -- Despite a very strong real estate market defined by low vacancy and rapidly rising office rents, the Seattle-Bellevue market remains a relative bargain for tech companies compared to major tech hubs such as San Francisco and New York, according to a new report issued today by JLL.

The firm’s 2015 Technology Office Outlook confirms that demand, driven to a great degree by Puget Sound technology firms, which employ more than 131,000 people locally, has pushed office vacancy to its lowest level in ten years.  This, in turn, is pushing rents steadily higher; rents grew by almost 8 percent in the last 12 months.   Yet, at an average overall direct asking rent of $33.70 per square foot, the Seattle metro area still more than competes with larger, more established commercial centers.  The equivalent rent in San Francisco, for example, is $66.80.  

“We’re in a location of prime appeal for tech companies because of the depth of young talent in the region, the quality and affordability of both our commercial and residential real estate, and the overall standard of living that we enjoy here, all of which attracts the type of workers coveted by tech companies,” says Chris Hughes, managing director, JLL.

Average monthly apartment rents in a sizzling hot Seattle residential market are still less than $1,400 per month, compared to $2,800 in New York and $3,000 in San Francisco.   Average annual tech wages top more than $154,000 in the Puget Sound area where unemployment is well below even the national average at 4.1 percent.

As a consequence, one of the biggest challenges facing tech companies looking to expand in Seattle is how quickly they can find both talent and real estate. 

Even though the local tech sector saw 8.8 percent employment growth last year, an estimated 25,000 tech jobs went unfilled over the last six months and the state of Washington recruits more tech workers than any other state.  The overall office vacancy rate is hovering around 10 percent, limiting options for companies seeking to expand.  However, with several million square feet of new office product due to be delivered in Seattle and Bellevue in the next 24 months, tech companies that plan ahead will be able to lock up excellent space options. 

“Creative space users in the market today for additional space are having to get creative to find the right deals in what is still a tightening market,” says Hughes.  “But that pressure is likely to begin to ease in 2017 as new space comes online and tech companies see far more options than they can see now,” he added.

About the Technology Office Outlook Report
The report helps technology companies make informed expansion decisions and provides insight for investors looking to find the next high-tech growth opportunity. JLL’s research ranks 37 U.S. markets by potential investment opportunity and by the best location for continued expansion with our proprietary Locator Matrix.

For more news, videos and research resources on JLL, please visit the firm’s U.S. media center webpage. Bookmark it here: http://bit.ly/18P2tkv.

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000.  On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $57.2 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.