Seattle's Big Deal
In a former sushi restaurant in Seattle's University Village Shopping Center, Amazon opened its first-ever physical bookstore last November. At 5,500 sf and about 2,000 sf for storage, it is about the size of a traditional independent bookstore, but woefully smaller than the 40,000 sf that Barnes & Noble occupied in the shopping center until 2011.
While Amazon is not squandering square feet on physical book selling, it continues to gobble up office space in Seattle's CBD. After signing a lease for an entire city block next to its headquarters, Amazon is on track to own or lease about 10 msf in the downtown - about 25 percent of Seattle's class A office space. It has put a rent-growth squeeze on other office tenants as CBD rents have increased from $32.12 at year-end 2014 to $37.39 in 3Q15. But that could change. According to Kidder Mathews, Amazon has already identified 9.8 msf for occupancy by 2019, pretty much removing itself from the future leasing equation. With about 9 msf under construction and only 60 percent of it pre-leased, Seattle's office rent growth curve may flatten a bit in 2017.
“As the traditional tech markets like San Francisco and New York become increasingly unaffordable for younger firms, markets like Denver, Boulder, Nashville and Salt Lake City are poised to capture the next wave of tech demand.”
- JLL Technology Office Outlook
Macy's Opens Off-Price Stores
Macy's has opened six off-price Macy's Backstage in the new York area, and has plans to open 50 more nationwide in the next two years. At least 10 of those stores will operate in current Macy's stores, occupying 20,000 to 35,000 sf of existing space. At the same time, Macy's is closing 35 to 40 of its underperforming department stores, which will not help struggling shopping centers where they are located.