Report: 2023 will be a Pivotal Year for Seattle Office Market

A new report from Kidder Mathews on the state of the office commercial real estate market in Seattle indicates 2023 will be pivotal for companies dealing with a sector that continues to struggle post-pandemic. Rising vacancy persists and net absorption remains negative, so the year will be telling as to how corporations dictate remote work policies, office layouts and employee density ratios.

Vacancy in the first quarter of 2023 has spiked from 10.52% to 11.21%, and the region has now seen an increase in 11 of the last 13 quarters since the 5.79% vacancy rate in Q2 of 2019. Net absorption in the first three months of 2023 was -693,000 square feet while sublet vacancy stands at 18%.

Despite the struggles, rents in Puget Sound increased across the board, with the highest average rent in the Eastside at $41.97-per-square-foot. According to the Kidder report, investment activity has been sparse in the turbulent economy, with only three office sales closing in the region above $10 million in Q1.