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Puget Sound Retail Market Remains Relatively Steady
The Puget Sound retail market maintained relatively steady fundamentals through the third quarter, with positive absorption continuing despite more measured leasing activity, according to a report by Kidder Mathews.
Retailers remain selective in their expansion strategies, favoring established locations and smaller, efficient store formats as slower employment growth and elevated consumer costs influence decision-making. Retail vacancy remained low and largely unchanged during the third quarter, while average asking rents were $1.93 per square foot in Q3, unchanged from a year ago and slightly below the previous quarter.
Development activity increased during the third quarter, with 215,000 square feet of new retail space delivered, bringing year-to-date completions to approximately 306,000 square feet. Despite the increase in deliveries, vacancy remained stable, indicating that new supply has so far been absorbed without materially disrupting market conditions. All three quarters of 2026 have now recorded positive absorption, showing a meaningful reversal from the occupancy losses experienced in 2025.
