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BELLEVUE, WA-Researching the market for high-tech space in the Seattle area, spoke with Kevin Smith, a broker with the Bellevue office of Cushman & Wakefield. When we inquired about the demand for telecommunications space, Smith replied, “Funny you should ask, I’m trying to find the answer to that question myself.”

Smith is working out the details for listing a high-tech Eastside space, complete with 1,500 sf of raised floor. Thus far in his pre-listing fact finding, Smith has heard of little activity beyond companies in the market for 80 sf to 250 sf of raised floors and racks. He estimates that the cost of the special infrastructure in his potential listing ran a good $250,000. Supply and demand, however, says there’s very little intrinsic value in something nobody wants.

Smith says on the Eastside alone there are approximately 2.5 million sf of space up for sublease. Looking to re-tenant traditional office space is tough enough. But high-tech tenants are, at the moment, as scarce as the spotted owl.

So what is a landlord to do? “They might be looking at having to throw dollars to convert spaces back to plain-ol’ vanilla–walls, carpet, cube space,” says Smith, adding, “It would make for better marketing to new tenants–as opposed to (spaces) being in their current condition (with high-tech infrastructure).”

Smith described the market as “definitely overbuilt,” and its common knowledge that development of new office space (high-tech or otherwise) has slowed to the pace of glacial movement. When leasing activity does once again pick up, Smith expects it will begin with the larger corporations, followed by smaller companies whose confidence is buoyed by seeing the big boys take the first step.

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