As downtown Seattle offices empty, city facing years of 'zombie' towers

The city has a notorious open air drug market within 2 blocks of one of its main tourist attractions at Pike Place. Downtown is generally not a pleasant place to visit.

Yes. I think remote works for a lot of people, but at a societal level we need real-time in person collaboration among a large swath of society to accomplish interesting tasks. I say that as someone who works entirely from home and really enjoys it.

Yeah, when I hear about how the tax changes are going to result in a huge exodus of millionaires it's not backed by data. The data shows millionaires actually move LESS than the general population. Places that instituted high taxes didn't see an exodus. It turns out if you have a great city with great physical and social infrastructure, people want to be there. Seattle is building both. The physical infrastructure is better now then when I moved there 10 years ago. I just took a train to Bellevue from downtown Seattle for a couple bucks. Waterfront looks amazing and beautiful now. City is really clean.

Seattle here, and a real estate nerd.

This is almost entirely an artifact of the financial instruments used to pay for these buildings, regardless of any Seattle policy changes. The Seattle Times has always been a conservative rag, and their editorial board hates the new mayor, so they hit the "Seattle is dying" story as often as possible. They've got a long history of this whenever there's leadership they don't like, ask me about it!

In Bellevue, office vacancies are low because most have long term tenants - even if the spaces aren't full of workers, the companies paying for them can continue to do so.

In Seattle, most office space is leased by smaller companies. We have diversity in availability, which is great, we have tiny office leases available as well as big ones. I believe those smaller spaces also often had shorter leases.

There are some spaces in Seattle where an anchor tenant (Indeed with 11 floors in the 2+U building at 1201 2nd Ave is a good example) shrank the footprint they use, and quickly sublet floors they aren't using. Those sublets can be priced appropriately for the market, and the main tenant keeps paying the original lease price.

However, when a space loses a tenant, the bank can't just drop the price for the owner, the same as you can't just pay less on your mortgage if you get a lower paying job. That has to go through a long, painful process, and usually the building will end up sold before pricing can change.

This is lag. It's easy to correlate it with a choice by Amazon or with new taxes, but there's quite a bit of demand for office space in Seattle, just not at the prices the owners are forced to ask with their financing instruments.

We just saw another building turn over, US Bank Center. The new owner bought it at a price where they'll be able to lease it competitively, and it won't sit empty. We'll see that continue to happen.

Seattle has a few confounding factors: - Higher taxes that are not present in surrounding cities - A public school system that is hot garbage compared to 20 years ago (Eastside schools are still ok) - Amazon as of almost a decade has been pushing hiring to their Eastside offices, and trying to freeze headcount in the state overall - Lots of the engineers you want to hire live on the Eastside

Short term, Bellevue is a better place to have your office. Mid term, the big winners are Texas, Vancouver (CA) and India. A little longer term, the lower end of all those jobs are gonna anyway in a puff of tokens.