The regional office market continues to struggle in Seattle, Washington, marked by rising vacancy, negative net absorption, and meager sale activity. A new report from Kidder Mathews indicates that regional vacancy increased from 11.21% last quarter to 12.21% currently, a 100 basis point spike.

Despite steady job growth through the 1st half of 2023, the regional economy faces continued challenges through late 2023 and into 2024 with high inflation levels and moderating job growth projections. Seattle’s office vacancy continues to rise rapidly over the quarter to 15.51%, up 125 basis points from last quarter’s 14.26%. The rate is up 257 basis points from 12.94% one year ago. 

Total office sales volume over the quarter was extremely low at $92.5 million following three previously low volume quarters. Despite the downturn, there were two exception markets with Southend and Northend, which both posted nominal vacancy improvement dropping from 15.66% to 15.61% and 8.14% to 8.10%, respectively.