Hudson Pacific in Talks for 250K sf Office Lease in Seattle

Hudson Pacific Properties made a 17-story speculative bet on Seattle — and claims it has major tenants poised to fill half its offices.

The Los Angeles-based developer said it’s drawing interest from companies looking to lease between 45,000 and 250,000 square feet of offices at its Washington 1000 building, at 1000 Olive Way in the Denny Triangle, the Puget Sound Business Journal reported, citing an earnings call.

The 546,000-square-foot tower was completed last year north of Downtown.

A 250,000-square-foot lease, if signed, would be the largest deal in Seattle in years, exceeding Apple’s 193,000-square-foot lease at Arbor Blocks 333 late last year, according to the newspaper.

Arthur Suazo, the executive vice president of leasing at Hudson Pacific, said the company is “in negotiations” with two potential tenants for leases that would start next year.

He pointed to a sense of rising public safety in Seattle, along with cleaner streets and revitalized shops and restaurants, which has increased office demand by tech firms while helping stabilize the market.

“We anticipate transacting in the coming quarters,” Suazo told analysts.

A spokesperson for Hudson Pacific, as well as its broker, CBRE, declined to disclose the prospective tenants.

Industry sources told the Business Times they weren’t aware of any firms seeking 250,000 square feet of offices — an astonishing lease deal.

The Washington 1000 building makes up more than half of the 885,000 square feet of new construction available for lease in greater Seattle, according to CoStar. There’s another 5.3 million square feet of offices in the pipeline, including Microsoft‘s Redmond campus expansion.

One analyst asked about tenants choosing Bellevue over Seattle, as large companies like Zoom, OpenAI and Walmart have done.

Seattle landlords must grapple with Proposition 1A, the new voter-approved measure that will require businesses to pay a tax on employees with total annual compensation more than $1 million to pay for workforce public housing.

The new tax isn’t necessarily a deal-breaker, according to Hudson Pacific Chairman and CEO Victor Coleman.

Two large, unnamed tenants that “were earmarked to go to Bellevue, recently changed direction, even with Prop 1A,” he said. The companies are now looking in Seattle’s Pioneer Square, where Hudson has some empty offices.

In Bellevue, office vacancy is 16 percent, compared to 30 percent in Seattle, he said. Bellevue’s average price per square foot is $65 while Seattle’s is $50, nudging prospective tenants to Seattle.

“So the economic difference is a big momentum shift for companies that want to make a move, versus the million dollars that employees are going to pay for,” Coleman told analysts.

— Dana Bartholomew