Renton is Viable Plan B for Office Tenants
Seattle and Bellevue are experiencing sub-6% vacancy rates, along with falling and record lease rates, while the average cost of space in the Southend market is 39% to 43% below Eastside and Seattle full-service rents.
RENTON, WA—A recent office lease underscores the continuing demand and growth of the Renton submarket due to the increasing costs in Seattle. AECOM leased 23,700 square feet at Triton Towers, which consists of three seven-story steel and concrete buildings totaling 407,000 square feet. For AECOM, the lease is a relocation from Seattle to Renton.
The lease caps a total of 61,000 square feet of new leases this year at the class-A office campus. Newmark Knight Frank facilitated the transaction.
“Renton has earned a top spot as one of the fastest-growing large municipalities in the region. Its affordability when compared to Seattle and Bellevue is increasingly attractive to a wide base of industries as demonstrated by the leasing activity at Triton Towers,” said Cavan O’Keefe, NKF senior managing director.
O’Keefe, along with executive managing directors Mike Schreck and Tim O’Keefe, represented building owners Hines and funds managed by Oaktree Capital Management LP in the lease. AECOM will relocate to Triton Towers early next year.
In addition to this deal, recent leasing activity at the property includes Genoa Healthcare occupying 29,900 square feet, relocating its corporate headquarters to Renton from Tukwila, and new leases with Collinear Group LLC, Westways Staffing and Eastside Oral Surgery.
“The increasing cost of living and working in Seattle continues to drive tenant activity in Renton. The workforce is moving here to benefit from a lower cost of housing plus workers gain from a reverse commute. The Triton Towers campus also has walkable amenities and transit hubs which many Southend buildings lack,” adds Cavan O’Keefe.
Triton Towers, located at 707 S. Grady Way, is one of the few buildings with available space in large blocks. It is 13 miles southeast of Seattle and 11 miles from Bellevue on the southern shore of Lake Washington, situated with access to three major freeways, I-405, I-5 and SR-167, and minutes from the SeaTac International Airport.
“Triton Towers was attractive due to the easy transportation and freeway access, signage opportunities and nearby retail amenities,” Cavan O’Keefe tells GlobeSt.com. “The building also has efficient +/- 20,000-square-foot floorplates and offers a class-A Southend feel.”
According to NKF’s third quarter 2018 Puget Sound office market report, the market has recorded unprecedented growth with Seattle and Bellevue experiencing sub-6% vacancy rates, along with falling and record lease rates announced daily. The average cost of office space in the Southend market is 39% to 43% below Eastside and Seattle full-service rents, respectively. While rates continue to rise in Seattle, more tenants will look to Renton for relief, notes O’Keefe.
“For 2019, we believe that with an ongoing tightening of core markets at south of 6% vacancy, we will continue to see a tenant migration to submarkets such as Renton/Tukwila as well as Bothell and the I-90 corridor,” he tells GlobeSt.com. “Tenants are going to continue to seek greater space options and an escape from record rental rates.”