Economic slump slows growth at business park

Published 1:37 pm Thursday, October 2, 2008

SNOQUALMIE – Since Philips Oral Healthcare first moved to the city in 1999, the Snoqualmie Ridge Business Park has attracted other companies largely on the fact that it is much cheaper to lease office space or construct a new facility here.

But as the Puget Sound tries to revive itself from its economic hangover, the disparity in costs between the Seattle-Bellevue area and the Snoqualmie Valley are shrinking. Once hard-to-find office space is now vacant and lease rates have dropped.

“The vacancy rate in east King County is at a record high,” said Snoqualmie Building Official Jim Tinner.

Leasing space in the recently completed Trailside Building in the business park comes in at $16.50 per square foot. At one time, that would have been a steal compared to leasing space in Seattle or Bellevue, but the tide has shifted.

According to real-estate company CB Richard Ellis, lease rates for the first few months of 2002 were $25.74 per square foot for the Eastside and $28.33 for Seattle. Only last year, those same rates hovered well above $30 per square foot. The vacancy rate for the Puget Sound region for the beginning of 2002 was more than 14 percent.

“There’s just a lot of excess space,” said Tom Bohman, director of the brokerage firm Cushman & Wakefield.

That makes it more attractive to locate an office in metropolitan areas, and the net effect has been a decline in activity at the Snoqualmie Ridge Business Park.

“There have been several projects anticipated last year that didn’t happen,” Tinner said.

With the future unclear, many companies are consolidating their operations. That was evident when Great Plains Software – owned by Microsoft Corp. – moved from the business park to its parent company’s headquarters in Redmond this year.

But it’s much too early to panic. Debi Frausto of Quadrant Corp. said even if things stay as they are, the Snoqualmie Ridge Business Park is still an appealing home for a business.

“There’s always somebody doing deals, regardless of the [economic] cycle,” she said.