Seattle Real Estate Market Reports

Seattle Office Market

4Q22

After a second quarter of economic hesitancy and uncertainty surrounding return-to-work plans, the Puget Sound office market softened in the fourth quarter of 2022. Despite three straight quarters of positive absorption in 2021, the region’s office fundamentals were bumpy throughout 2022. Overall, the market had negative 685,252 square feet of absorption for the year, largely due to negative 712,766 square feet of absorption in the fourth quarter of 2022. Overall vacancy edged up to 11.8%, the highest it has been this cycle, with direct vacancy at 10.5% and sublease vacancy at 1.3%. Availability rates also increased this quarter, with 14.0% direct availability and 4.5% sublease availability, from a total of 17.4% availability in the third quarter of 2022. Despite the uptick in available sublease space this quarter, the amount of sublease space available is 14.2% lower than at its peak in the first quarter of 2021.

Seattle Industrial Market

4Q22

Though activity slowed somewhat in the final quarter of the year, the Puget Sound industrial market maintained healthy indicators over the course of 2022, despite lingering economic uncertainty in the region and across the country. Investment activity heated up after a slowdown in the third quarter of 2022 while the leasing market, where demand for logistics and warehouse product remains white hot, posted strong annual gains. As a result, the market captured 464,513 square feet of occupancy growth in the fourth quarter, with annual net absorption totaling nearly 7.5 million square feet. A healthy portion of this growth was realized in the preleasing of new construction, of which 4.4 million square feet was delivered in 2022. Construction and entitlement processes have lengthened over the last two years due to labor strikes and supply chain issues, which in turn has delayed some absorption, a trend that is expected to reverse as development constraints ease.