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BELLEVUE, WA-The last time direct vacancies in the Eastside office market approached this third quarter’s rate of 5.99% was five years ago, when a small, upward blip in the third quarter of 1996 pushed the rate to 5.80%. But it took only 12 months to lose all that ground the market had gained as vacancies have rocketed more than four full percentage points from a squeaky-tight 1.92% in the third quarter of 2000.

These figures, provided by the local offices of Colliers International, paint a picture of sharp turns — but when subleases are factored into the equations, the lines on analysts’ graphs become even more dramatic.

The Eastside’s office inventory totals just a bit more than 25.9 million sf, with 1.55 million sf of that running as direct vacancies. But, add to that 1.73 million sf of sublets, and the number spikes to 12.66%.

Bellevue’s Central Business District and the Interstate 90 Corridor contain the two, largest chunks of the Eastside’s sublease space. With 563,079 sf and 535,636 sf respectively, the two collectively account for 64.6% of the total. Of that, 97% is class A space.

So far, at least, many landlords have kept the buzzards off the roof by feeding on letters of credit provided by roughed-up high-tech tenants looking to sublease their space. But, as those leases come full term and credit runs out, the scramble for tenants will surely intensify. In Bellevue, 52.1% of its vacancies are sublets; the figure for the I-90 Corridor is 75.2%.

Chris Reed, a broker with Colliers’ Bellevue office, says the 270,000-sf Onyx lease in the 112th and 12th building is the first major example of sublease space jumping to the direct category. “Onyx has worked out an arrangement (with the landlord), so now that space is direct,” Reed says.

But Bellevue isn’t dead; it’s just moving very slowly.

“There are tenant deals going on,” says Reed, adding, “Some of that comes from tenants moving out of one space and into another.” But he makes a point of noting that not all deals are the result of companies simply trading places. Reed mentions Microsoft’s recent purchase of Spacelabs’ facilities in Overlake. And, while the medical manufacturer is known to be hunting for smaller digs, the change is spurred in part by Microsoft’s growth.

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