Integra Realty Resources' Seattle senior managing director Allen Safer tells us our robust tech economy continues to spur the office market: "A lot of institutional investors are now competing for the few properties available, which has caused cap rate compression." In fact, local office cap rates are now roughly back at pre-recession levels. There are a few clouds on the horizon for office, howeversuch as the fact that Boeing is seriously considering South Carolina for its next assembly line, which would siphon some jobs away from the Puget Sound region. Recently IRR released its Q1 office numbers for the market, and things are still tight: vacancies are at 5%, the lowest average for a metro area in the Western US.

The picture is different for Seattle-area industrial. The widening of the Panama Canal (seen here during its original construction), which will be completed next year, is causing uncertainty about the demand for Seattle industrial space, Allen says. Some of the container traffic thats been coming through Seattle might be diverted through the canal, so there isnt a lot of new industrial product under way.