Seattle-Tacoma Retail Market Report

Vacancy levels off, though gaps persist. After three years of rising vacancy, retail conditions are finding balance, with the metrowide rate holding at 4.7 percent in June for a third consecutive quarter. Modest leasing, however, suggests that stabilization reflects fewer closures more than rapid tenant growth. Notably, multi-tenant vacancy fell 30 basis points year-to-date to 6.4 percent, but its near-record spread above the 4.0 percent single-tenant rate reflects still soft demand for larger shopping center space. Smaller-footprint leasing has been steadier, and new Seattle zoning rules may broaden demand by allowing cafes and other small retailers in residential areas for the first time in decades.