Rainier Square Tower Bank ofAmerica subleased 115,000 square feet at Rainier Square Tower lastquarter.

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SEATTLE—Leasing dropped for the second consecutive quarter to1.9 million square feet in fourth quarter 2019, according toresearch from Savills. This is down 4.8% from the previous quarterand 7.7% year-over-year.

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This translates to leasing activity falling below the five-yearaverage. Specifically, leasing activity was down 18.5% below thefive-year average of 2.3 million square feet per quarter. Quarterlyleasing previously peaked at 4.1 million square feet in the fourthquarter of 2016 and bottomed at 1.3 million square feet in thesecond quarter of 2017. Nearly 200 office leases were signed in theregion in fourth quarter 2019, averaging almost 9,545 square footper lease. And, a majority or 52.2% of large transactions occurredin the Downtown submarket.

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But, despite the general slowdown, tech giants remain active,says Savills. Six of the 10 largest leases in the quarter came fromthe tech sector, which executed 69.2% of the quarter's majortransactions.

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Notable tech giants were particularly active in the fourthquarter. Facebook expanded by 324,999 square feet at 124th AvenueNE in Bellevue/Eastside and into a new location at 9805 WillowsRoad NE (80,980 square feet), while Amazon expanded by 160,000square feet at 300 Pine St. in downtown. Also notable, Bank ofAmerica subleased 115,000 square feet at Rainier Square Tower.

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Moreover, class-A asking rents held flat as availabilitystabilizes. Seattle's overall average office asking rent was $39.91per square foot in fourth quarter, reflecting a 4% increase fromthe previous quarter, but a more muted 1% increase during the lastyear, according to the report.

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Rents ranged from a low of $25.65 per square foot in Tacoma to ahigh of $46.54 per square foot in downtown Seattle. Class-A rentsheld flat year-over-year, even with a 2.9% uptick in the quarter,now standing at $48.99 per square foot. In 2019, rents in theCentral Business District increased by a mere 0.9% to $44.98 persquare foot, while suburban rents increased 4.8% to $29.81 persquare foot.

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All submarkets are at or near market balance except Southend.Core and suburban fundamentals illustrate a striking disparity,with fourth-quarter availability rates of 10% in the CentralBusiness District and 18.7% in the suburbs, both reflecting modestquarterly tightening. Submarket availability rates range from 8% inBellevue/Eastside and 11% in downtown Seattle to a high of 28.2% inSouthend, according to the report.

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"Large tech users on the Eastside continue to take down anyavailable space," Chris Kagi, assistant director with Savills,tells GlobeSt.com. "In the fourth quarter, Facebook leased morethan 400,000 square feet in two separate locations inBellevue/Eastside. As a result of the unrelenting activity, thissubmarket has become one of the most competitive in the entirecountry."

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More than 2.7 million square feet of office space is currentlyunder construction, accounting for 2.4% of total officeinventory.

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Lisa Brown

Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.