By Kate Snyder
With uncertainty surrounding the office sector in the Puget Sound region, experts have been watching closely to see how the leasing market might play out for the rest of the year. In a recent conversation with The Registry, Scott Blankenship, Colliers executive managing director and market leader for Puget Sound, shared his thoughts on the market. With more than 30 years of brokerage and executive management experience, Blankenship leads all brokerage operations, recruitment and business development to accelerate growth within the Puget Sound area.
What trends of note can you say have emerged for the market in the Puget Sound area?
Job wise, the Puget Sound region has stayed rather insulated compared to the rest of the country, due to the strength of our regional tech employers. The pandemic, rising interest rates and geopolitical issues are all obvious contributing factors to a changing business landscape.
Remote work has also become the new norm and as a result, the downtown cores saw less traffic both on the roads and in the city. Companies have been able to pivot with their employees to formulate hybrid work plans and schedules that merge remote working with working in the office. Suburban market traffic took the place of urban markets as retail and service remains a priority for the public.
What do you think will happen in 2023 in terms of growth? What would you expect to see more and/or less of?
I expect 2023 to see a slow move back to the “norm” as it relates to the workforce. Ushering employees back into the office is an important factor for overall productivity, as synergy and face-to-face time are still basic components of any successful business. The return to office movement also impacts the retail and service world dramatically, as more folks occupy the urban markets for their 40 hours a week.
What are people looking for in properties these days, and will that evolve in 2023?
There’s a large emphasis placed on the amenities a space offers for workers. This includes common areas with touchdown work stations, easy access to food and service, intuitive drop off/pick up locations for ride-share services, food delivery, etc.
What surprised you the most over the last 12 to 18 months? Do you think that trend will continue into 2023 and beyond?
The ability for employers to embrace the remote work mentality has been surprising, as well as the willingness of those same employers to provide support for the remote work employee base. I think this trend will continue; however, the employers will strive to get employees back to the office at least on a fractional weekly schedule and move towards employees in the office the majority of the time.
As you look at the market dynamics in 2023, what do you think will be the most significant things that will define the industry in the coming year?
Rising interest rates and continued rising of construction costs are two factors that I am watching closely, as the trickle-down effect of these two negative factors directly impacts the commercial real estate industry.
Is that worrisome? Why or why not?
It is worrisome as it handcuffs all lines of business from lending to production of materials to new construction and, ultimately, all real estate transactions.
What opportunities do you see in the coming year, and how are you and your firm preparing for the year ahead?
The biggest opportunity I see is the ability to grow our market share across all commercial real estate business lines throughout the Pacific Northwest. Growing our team of top brokers in each business line is a major priority for myself and my team.
A year from now, what do you think we’ll be talking about?
I think in a year’s time, we will be talking about the move of daytime employees back to the office and how that affects the health of our urban core markets; the office sublease category is a business line that I am also watching closely and curious how the percent occupied rate changes in 2023.
