After declining in the last half of 2013, office vacancies rose again in Pierce County in the second quarter of this year as two government-related businesses cut back on office rentals in the City of Destiny.
A new survey by Colliers International shows total office vacancies in Pierce County rose to 13.82 percent in the second quarter compared with 12.81 percent in the first three months of 2014.
The vacancy rate in Pierce County in the last quarter of 2013 was 12.37 percent.
The commercial real estate company blamed the increase in vacant space in part on two events, the state Department of Social and Health Services’ vacation of 86,000 square feet of space at Centennial Place II and the vacation of 12,000 square feet in downtown Tacoma’s high-rise Tacoma Financial Center by Avue Technologies Corp. Avue services federal agencies human resources management operations.
Avue, a privately-held company, still maintains its headquarters on the eighth floor of the Financial Center. The vacated space was on the building’s 10th floor.
Centennial Place II is one of two buildings on South State Street that DSHS had leased through 2013. The agency still occupies the other building. The Centennial Place project encountered financial difficulties in 2010 when its finances were restructured.
The increasing vacancies in Pierce County were in contrast to declining vacancy rates in Seattle and Bellevue. In Seattle, office vacancies fell to 10.64 percent compared with 11.18 percent in the first quarter. On the Eastside, office vacancies dropped to 8.47 percent compared with 9.34 percent in the previous quarter.
Both Boeing and Amazon are actively leasing offices in Seattle and on the Eastside. Colliers predicted that after pending Boeing and Amazon leases are consummated, Puget Sound vacancy rates will drop to the lowest level the region has seen since 2006.