Seattle Office Vacancy Reaches Record, but Inflection Point Expected in 2026
Seattle's office market might be home to tech giant Amazon ? but that isn't stopping vacancy from hitting unprecedented levels, although the outlook calls for a reversal in 2026. This is, according to a fourth-quarter report from Colliers, which revealed the category reached a 33.4 percent rate, an all-time high. Also, this represents a 3.3 percent spike year-over-year,
However, on a positive note, Colliers notes that the vacancy is "stabilizing," as the quarter-over-quarter increase was only 10 basis points. And the momentum appears to be heading in the right direction for office in Seattle.
"With no general office buildings currently under construction, the market is positioned next year to potentially see the first vacancy decline since 2020," Colliers explained.
Also, deliveries have been nonexistent for at least the past two quarters.
Moreover, the leasing activity looks encouraging. There is a growing number of tenants willing to commit to 10,000 square feet or more for a period of at least 60 months, according to Colliers.
"The Seattle CBD, Lake Union, and Ballard/U District, have been the most popular submarkets with tenants this quarter," Colliers explained.
"Urban amenities, such as public transportation, bars, and restaurants, as well as competitive pricing and high-quality workspace are driving demand."
Fox Television Stations signed the largest lease in the fourth quarter, thanks to its 27,000 square feet deal in the CBD.
While the outlook looks promising, the fundamentals were weak across the board. Class A rents dropped by two percent year-over-year to $54.19 per square foot, full service gross. And although net absorption remained negative at -9,500 square feet, the number is well down from -492,000 square feet in the previous three months and -194,000 square feet a year ago.
Now, Seattle office landlords will hope for a better first quarter.
Source: GlobeSt/ALM