The World Economic Forum recently released the annual Global Competitiveness Report, naming the United States the number one most competitive economy in the world for the first time since the early 2000s. According to the report, the nature of economic competitiveness is shifting, as economies are “increasingly transformed by new, digital technologies,” which are “creating a new set of challenges for governments and businesses.” The United States is followed by Singapore, Germany, Switzerland and Japan.
Given that technology has become an integral part of the world economy, it doesn’t come as a surprise that it is contributing to economic prosperity, as an RTT News list of the top ten employers in the United States is filled with primarily tech-driven companies and is topped by Amazon, the second-largest private company in the nation. In early September, “Amazon became the second U.S. company to reach the $1 trillion value mark, just a month after Apple reached the milestone.”
Seattle and the Eastside are both benefiting from an influx of technologically-driven growth, both from Amazon and other companies including Facebook, Apple, Google and more.
"Seattle’s relative affordability, high quality lifestyle, lack of a state income tax and investment in transportation infrastructure will give the Seattle metro area a strong competitive advantage over other West Coast tech centers.” - Dean Jones, President & CEO Realogics Sotheby’s International Realty.
Seattle Tech Update
Amazon now owns twice as much office space as it did in 2016 and will reportedly occupy 15 million square feet of office space throughout downtown Seattle with current commitments.
Apple is expanding within Two Union Square with more than 70,000 sq. ft. to office 500 employees (rumors persist that it is making offers on larger office space).
Google continues to expand in South Lake Union (with five buildings either under construction or in planning), comprising nearly 1 million sq. ft. of office space with occupancy expected by early 2019 – the downtown Seattle campus could employ more than 4,500 people.
Facebook has opened a new campus at 1101 Westlake in addition to other leaseholds in South Lake Union with current capacity for 3,000 employees. The social media giant recently applied for permits for Oculus expansion of more than 60,000 sq. ft. of office space in the Home Plate Center near Safeco Field in SODO. It’s presumed the company leased all 124,000 sq. ft. of the available space, but is merely building out the first half at this time with future plans to grow into the remaining space.
F5 Networks has leased 516,000 sq. ft. in a new office tower (now called F5 Tower) with an estimated 1,500 employees and room to expand. Excess office space is temporarily being sublet and attracting other employers.
Expedia plans to relocate its Bellevue headquarters to Interbay (Seattle waterfront) in 2019 in what may eventually comprise of 1.9 million sq. ft. of office space for approximately 8,000 employees (recent indications suggest the company will moderate its growth in measured phases). Many Bellevue-based employees will either relocate to Seattle or face an arduous commute.
WeWork Northwest continues to expand in the Seattle region and is eyeing a total of 2 million sq. ft. of office space in the greater Seattle area with new commitments in the World Trade Center North building and a 36-story tower being developed in Belltown (this tenant is critical for future growth in tech as many startups are incubating in co-working environments).
Eastside Tech Update
Amazon occupies one office tower in Bellevue with 2,000 employees and plans for another with the potential of adding another 2,500 employees by 2020 - that's about 10-percent of the regional headcount.
Vulcan Real Estate is planning 3 million sq. ft. of office space - likely to target additional expansion of Amazon and other tech users. This developer is very close to the tech growth, and their commitment to Bellevue is a strong signal of additional tech expansion in the region.
Tableau Software has preleased 180,000 sq. ft. of Kirkland Urban for occupancy in 2019.
Facebook will reportedly develop 650,000 sq. ft. of office space in Redmond and along Willows Road for their Facebook Reality Labs/Oculus campus, according to public records.
Microsoft is doubling down on its own campus rebirth with a multi-billion-dollar expansion that could office upwards of 8,000 employees. The direct connection to LINK light rail means Microsoft employees could choose to live in downtown Seattle or downtown Bellevue and enjoy reasonable commutes to Redmond.
SRM is planning a 136,000 sq. ft. building adjacent to Google's Kirkland campus, likely for Google’s continued expansion.
Rumors persist about expansion of Alibaba and other international tech companies seeking growth in the region (including potential leases at Southport on the Renton waterfront).
While not tech-oriented, Costco Wholesale recently announced plans to expand it’s Issaquah headquarters by 1.2 million sq. ft. with room for 4,000 employees. Again, eventual LINK light rail service to Issaquah affords employees the option of living in an urban market and commute by train to work.
Commercial developers are clearly optimistic. Nearly 2 million sq. ft. of speculative office space is currently under construction in downtown Seattle with occupancy by 2020. That space will eventually attract additional companies and an estimated 13,000 new jobs will be created in the relative near term.
In other news on “tariff wars'‘…
🇩🇪️German Bundesbank President Jens Weidmann said he had seen “a certain change in mood,” and recent breakthroughs like the trade agreement between U.S., Canada and Mexico “have made this scenario of an uncontrolled escalation a bit less probable.”
🇨🇳️China’s top central banker emphasized that the country is committed to negotiations. “A constructive solution is better than a trade war,” Yi Gang, governor of the People’s Bank of China.
The "digital revolution" is coming and it could have 10 times the economic impact that the internet had, adding $19 trillion to the global economy. It's easy to assume U.S. advantages will last forever. However, France, Israel and India are leading the future with their "digitization plans" that involve investing in online infrastructure and enabling start-ups to flourish and move faster and faster at the speed of innovation. The essential inhibitor is "bureaucracy". Currently, the U.S. has no digitization plan.