Bank of America downsizing in Seattle office tower
Bank of America will shed additional space in the Fifth Avenue Plaza in downtown Seattle, a bank official said Tuesday. The decision could stymie real estate development in the neighborhood, where two big office towers are planned.
Marc StilesStaff Writer- Puget Sound Business JournalEmail | Twitter
Bank of America is vacating part of its namesake Fifth Avenue Plaza in downtown Seattle, a bank spokeswoman said Tuesday.
The move is a blow to this part of the downtown Seattle office market and could delay construction of two big office towers next to Bank of America Fifth Avenue Plaza.
“We did recently renegotiate our lease [at Fifth Avenue Plaza] for less space,” said Jennifer Darwin, the spokeswoman who works for the bank at its Charlotte, N.C., headquarters. She said the decision is in line with B of A’s overall strategy to use office space more efficiently.
Fifth Avenue Plaza has 934,000 square feet of office. The bank had leased about 84 percent of that space but over the years has sublet some of it to other companies. Today the bank is in around 510,000 square feet.
Darwin couldn’t say how much space the bank is giving back because renegotiation of the lease has not been finalized, though a person with knowledge of the decision put the number at around 310,000 square feet.
The office market around Fifth Avenue Plaza has been improving, providing encouragement to some developers to look at building new towers. But now comes Bank of America’s decision, which increases the risk of starting construction.
The vacancy rate for Class A space in Seattle’s central business district has fallen from 15.6 percent at the start of 2012 to 12.4 percent now, according to commercial real estate company Jones Lang LaSalle.
Even so, large swaths of space are still available for lease in the neighborhood. Kitty-corner from Fifth Avenue Plaza, for instance, is the 1.5-million-square-foot Columbia Center where, according to officespace.com, a fifth of the space is empty.
“There certainly is a lot of space between Columbia Center and the Bank of America building that has to be filled before someone pays a 30 to 40 percent premium to be in a new building,” said office broker Parker Ferguson, co-founder of Flinn Ferguson.
Daniels Real Estate of Seattle is planning to break ground before the end of the year on the 43-story Fifth + Columbia tower just west of Fifth Avenue Plaza.
On Tuesday, Kevin Daniels said B of A’s decision to shed more space does not give him pause about starting construction on Fifth + Columbia. He said you can’t compare “Class A+ new construction” to a 32-year-old “Class A-” building like Fifth Avenue Plaza.
Daniels said he’ll decide whether to start construction soon, once he finalizes permits with the city.
Schnitzer West, also of Seattle, has a 37-story project called Madison Centre teed up just north of Fifth Avenue Plaza. Schnitzer officials have said they will not start construction until they prelease some space.
Daniels says he is not surprised that B of A is giving up office space in Seattle. He said banks are shedding jobs due to automation and the economy across the country.
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