The downtown Seattle and Bellevue office markets are consistently touted as two of the most attractive investment markets nationwide. The proof is easy to spot.
Vacancy is well below five percent.
Rents have risen 25 percent in the last 12 to 18 months. Tenant improvements and other lease costs have fallen dramatically. The first signs of these trends were visible in late 1995 and led to an unprecedented round of office building trades starting in late 1995 and ending abruptly in 1996. Almost as a rule, these trades were at about 60 percent of replacement cost and at cap rates of around eight percent, due to existing rents well below market. A flurry of office transactions at the end of 1997 pushed market values much closer to today's replacement cost.