A hot commercial real estate market began to show signs of slowing as the end of the first quarter approached due to the impact of the coronavirus, according to JLL’s recently released Seattle/Puget Sound Q1 2020 Office Insight Report.
Three office projects, two in Seattle and one – Spring District Block 16 – on the Eastside were completed during the quarter.
“As March progressed there was a slowing in leasing and construction activity due to COVID-19,” the report stated. “This will continue with tenants slowing lease negotiations and delayed move-in dates. Seattle’s industry makeup has some areas of concern, particularly related to travel and coworking companies. At the same time, e-commerce and technology companies have shown strong resiliency and put Seattle on solid footing.”
Meanwhile, there was much to celebrate in the market prior to the virus-related downturn. Rents, for example, were up in the first quarter, with a year-over-year increase in downtown Seattle and a 3.3 percent increase on the Eastside.
“Most of the expansions and large new deals were limited to the Eastside, most notably Redmond and Kirkland, where over 500,000 square feet of new leases were signed so far this year,” the report stated. But, the report continued, “Expect leasing activity to shift dramatically as the impacts of COVID-19 register in the market.”