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Report: Seattle Retail Vacancy Remains Near Historic Lows
The Puget Sound retail market entered 2026 with relatively stable fundamentals, supported by resilient consumer spending and improving foot traffic, according to a recent report by Kidder Mathews.
While demand remains healthy overall, retailers have become more selective as slower job growth and ongoing cost pressures influence expansion decisions. Following a softer 2025, market conditions have largely stabilized, with tenants prioritizing efficient store formats and high-performing locations. Smaller-format and service-oriented retailers continue to drive activity, while demand for larger discretionary retail spaces remains comparatively subdued.
Retail vacancy remains near historic lows despite a modest increase over the past year. The direct vacancy rate was 3.9% in 2Q, up from 3.7% a year earlier, but has shown signs of stabilizing after moving off record lows. Retail rents have remained largely unchanged, with average asking rates holding at $1.95 per square foot in 2Q. Looking ahead, rent growth is expected to continue at a slower pace as retailers balance expansion plans against ongoing economic uncertainty.
