The Puget Sound industrial real estate leasing market finished the fourth quarter in solid shape, with a stable 3.4% vacancy rate and 890,000 square feet of absorption, but the market has reached a crossroads. A new report from Cushman & Wakefield indicates that economic uncertainty, combined with 6.9 million square feet of space due to deliver in 2023, could potentially lead to a considerable rise in vacancy levels.

Asking rents in the region are closing in on the $1.00 mark, increasing in Q4 to $0.95 per square foot on a monthly NNN basis, a year-over-year increase of 10.5%. Prices are expected to flatten in 2023 due to a slowdown in leasing activity and large projects delivering vacant.

Cushman & Wakefield says rents and vacancy in the Seattle region have reached pre-pandemic levels, and will likely continue the momentum through 2023. Absorption is forecasted to end the year in the black, thanks to continued demand from 3PL and e-commerce occupiers.