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Seattle Office Market Continues to Struggle in Q3
A new report from Kidder Mathews makes it painfully clear that the office sector in the Puget Sound Region remains very unsettled. Through the third quarter of 2022, vacancy surged to 10.43%, an increase of 24 bps from Q2, and the ninth vacancy rise in the last 11 quarters. Absorption was also negative, at -1.34 million square feet, and sublet vacancy was a stubbornly high 16%.
Breaking it down per submarket, South King County had the highest vacancy in the region at 17.15%. Seattle Close-In posted a slight decrease in vacancy totals in Q3, standing at 12.79%, while the Eastside market is the healthiest at 5.45%.
Kidder reports the office outlook is volatile. Even though unemployment remains low, many companies continue to allow remote work and hybrid models. Staffing shortages are still a challenge, with 2023 employment growth forecast to plummet to 1.9%, and now inflation has also become a concern.
- ◦Economy
