Morgan Stanley Extends 31,000-sf Downtown Lease

SEATTLE-In a time when many central business district buildings are suffering gaping vacancy wounds, the re-signing of a tenant with credit strength is cause for at least a minor celebration. And though most of Two Union Square’s 1,126,428 rsf is occupied, the five-year 31,036-sf lease extension by Morgan Stanley Dean Whitter is, nonetheless, welcome.

Peter Truex, Sr. VP with the Staubach Company, together with associate Sean Barnes, worked the deal on behalf of the tenant. Truex tells GlobeSt.com the financial services company (which Staubach represents in the Northwest) has resided in Two Union Square for a solid decade — since shortly after the 56-story tower was completed in 1989.

“Morgan Stanley took a look at their options throughout the market and elected to work with Unico and re-sign here because the real estate works for them and clients,” says Truex, adding that with the market being what it is, “It was a good time to renew.”

Truex was barred by agreement from disclosing the rent agreed to by Morgan Stanley in the extension of its 29th-floor space. A fourth-quarter report now pegs Class A space in Seattle’s CBD at $34.25/sf. And, a listing on OfficeSpace.com by the building’s leasing manager, Unico, states a rent range from $37/sf to $52/sf — depending on size and floor.

The Staubach broker did not have an exact measure of Two Union Square’s current occupancy, but the OfficeSpace.com listing shows only 50,675 sf available — which would translate to a direct vacancy of 4.5%. No sublease figures were available, and GlobeSt.com was unable to reach by deadline the leasing manager, Arnie Gillam of Unico, to verify the numbers.

Speaking to the downtown office market in general, Truex says he’s been seeing signs pointing to an up-tick in deal flow. “There’s nothing extraordinary going on by any means,” he hedges, “But there are some strong regional and national tenants looking.” The emphasis, however, is on “looking.” Would-be tenants may be window shopping but most are stopping short of the checkout counter.