Seattle & Northwest CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
Office Market in Seattle Region Sees Ongoing Stabilization
The Puget Sound office market finished 2025 with signs of stabilization following several years of volatility.
Vacancy rates remain elevated but are starting to level off as the rate of increase has slowed during the past couple of quarters, according to a recent report by Kidder Mathews. Leasing activity has improved steadily over the past two years, supported by a gradual return-to-office trend and selective expansion among tenants.
The final quarter of 2025 was the first positive net absorption quarter since 2021. Tenant demand continues to be driven by the artificial intelligence and technology sectors. The trend of flight to quality remains, with tenants prioritizing amenity-rich buildings in prime locations.
The market is expected to begin its recovery cycle in 2026. Many tenants have signed short-term renewals over the past several years, and there are indications of pent-up demand that could translate into longer-term commitments as confidence builds.
