Seattle-Tacoma Office Market Report

Lower asking rates for new builds draw tenants to Downtown. Entering this year, more than 15 firms were slated to move into a collective 600,000 square feet at trophy offices in Seattle proper. Lower asking rents for newer builds have led Downtown to this burgeoning success. The mean marketed per-square-foot rate for offices delivered here in the last 10 years was $42 entering 2024, more than $13 lower than the equivalent metric in Bellevue’s CBD, where record-level Class A stock growth has taken place since 2021. While core Class A vacancy may continue to rise beyond 23 percent, as more than 1.5 million square feet of speculative builds come online here this year, the favorable rent dynamic for newer offices should aid the lease-up of these deliveries. Although preferences for newer offices have challenged Downtown’s Class B/C stock, the Southend’s metro-low, sub-11 percent vacancy in the sector suggests that this area has faced less of an impact. Local tenant demand may even strengthen in 2024, as Southend’s mean Class B/C asking rent has held about $6.50 per square foot below the marketwide benchmark, providing an option for expanding budget-sensitive firms and those with upcoming lease expirations.