Broderick Group has just published their latest Q3 report on the Eastside Office Market. ByteDance, the Beijing-based parent company of TikTok, is doubling down on their presence in the Key Center tower. They’ve secured an additional 66,000 square feet of office space in the same building, until the end of 2025. Currently, ByteDance is already in the Key Center tower, leasing 44,000 square feet from SAP Concur. You can find them at 601 108th Avenue Northeast.
The Q3 report reveals that the Eastside, particularly in the Bellevue Central Business District, has seen a surge in tenant demand over the last 60 days. This demand encompasses everything from lease renewals to existing Bellevue tenants expanding their space, companies relocating from Seattle, and newcomers from out of state.
However, the statistics for the quarter tell a slightly different story. Eastside’s office vacancy rate has spiked from 11.7% to 14.0% in the third quarter. Boeing vacated around 700,000 square feet at Woodlands, and Amazon acquired one million square feet in the Bellevue CBD. As of the end of the third quarter, over a quarter of Eastside’s office space is vacant. Broderick Group suggests that we’ll need a consistent influx of new tenants and expansions to keep those vacancy rates from rising further.
The report also highlights a growing trend: in-person office usage is on the rise. Hybrid work models are becoming the norm, with companies realizing that being in the office can boost productivity, collaboration, and cost-effectiveness. Amazon, for instance, now requires three days of in-person work, while Meta in The Spring District is following suit. But there’s a standout exception: Microsoft remains steadfast in remote work, a deviation from the norm among Eastside’s major tenants.
The third quarter of this year saw a flurry of significant lease signings, and there’s more to come before the year’s end. Notable deals include Warner Brothers Discovery securing 47,398 square feet at Civica Office Commons, Southern Wine Spirits taking up 38,232 square feet at One Bellevue Center, and, of course, ByteDance’s expansion at Key Center.
With more than 20 tenants currently exploring or negotiating for a full floor or more in Downtown Bellevue, the report emphasizes the need to maintain and expand this high level of tenant demand.
This push is crucial, considering that there are a whopping 182 vacant or available floors in the Central Business District.
To put things in perspective, back in Q3 2019, before COVID-19, there were just 17 active tenants on the Eastside occupying a full floor or more. Fast forward to Q3 2023, and that number has jumped to 33 active tenants. The Eastside office landscape is evolving, and it’s an exciting time for the market.
