Year In Review | 2022

What We Got Right:

In 2022, Return to Work will be at employees' discretion (mostly).

Another year without strict office mandates. We’re seeing a clear separation in the office user profile and it surprised us initially. Younger employees out of college (Gen Z) are seeking mentorship and in a survey conducted this summer, Overwhelmingly wanted to be in the office 3+ times a week. Their managers, however (later age Millennial and Gen X) are more focused on the remote. This creates a gap in employee desire and employer offering and an interesting opportunity – does requiring office attendance attract the next generation who frustratingly experienced college through the pandemic era?

Meta/Oculus will expand more than any other company in the region.

While we got this right in 2022, our prediction for 2023 will be that they put a substantial amount of space on the sublease market as they reset the budget, employee count, and focus spending.

Landlords will (slowly) sign Co-Working deals again.

This one made sense for a couple reasons. Current user demand is for flexible, plug-and-play space in high-quality buildings. This type of offering goes against an owner's focus but falls directly in line with what flex providers offer. Second, landlords were hungry for any activity both in leasing but also occupancy within the building. Co-working brings both.

What We Got Wrong:

Seattle will experience a greater increase in net absorption this year than Bellevue.

As of 3rd quarter, Bellevue had a positive absorption of 900K and Seattle was negative 900K so we got this way wrong! However, we are going to let ourselves off the hook a bit and say that the prediction was right… but the timing was off. We expect Bellevue to be greatly impacted going into 2023 as rumors of Microsoft pulling out of their downtown footprint, Amazon being fickle w their occupancy plans, slower office demand all around and an expensive market create a perfect storm.

Professional Service companies will either contract in size or stay the same. Technology companies will grow.

We were… (half right…) but are going to put it in the “wrong column” as we have missed the mark on tech once again. This has proven to be an extremely stubborn sector as it relates to return to work. Time will tell if a recessionary environment in 2023 causes any change.

Life science will expand outside of core markets (SLU & Bothell).

The interest rate hikes of 2022 and subsequent pullback in VC funding made us miss on this prediction. Life Science demand overall slowed in 2022 and we are seeing some larger blocks on the sublease market in SLU. Not only did we miss this prediction for 2022 but are likely 5+ years out from seeing this trend come to fruition.

Our team is always here to help with any real estate questions you might have. Feel free to reach out to us.