Seattle Office Market Report

The following reflects Seattle office market conditions as of Q2 2026.

MARKET OVERVIEW

The Puget Sound office market is showing early signs of stabilization after several years of disruption. Vacancy remains elevated across the region, but the pace of increase has slowed, suggesting the sharpest occupancy losses of this cycle may be behind the market. Leasing activity has improved steadily over the past two years, though demand remains measured as occupiers continue to evaluate long-term space needs.

Leasing momentum strengthened in the first half of 2026, with 3.8M SF of office leases completed and the trailing four-quarter total reaching 8.1M SF. Downtown Seattle generated the highest overall leasing volume at 1.6M SF. Bellevue CBD stood out on a relative basis, leasing 851K SF year-to-date, or 6% of its inventory base, compared with 2% in Downtown Seattle.

Bellevue’s performance reflects modern office product, proximity to major employers, and an efficient, cost-effective business environment. Significant commitments from OpenAI, Uber, and Databricks reinforced the submarket’s appeal and the Eastside’s position as a preferred destination for expansion-minded companies.

The broader market continues to be shaped by large technology occupiers. Microsoft and Amazon maintain substantial regional employment bases, but their recent real estate decisions have centered on portfolio optimization rather than expansion, resulting in footprint reductions, lease consolidations, and disposition of surplus space. These moves reflect a broader right-sizing of office portfolios rather than a retreat from the market.

Demand continues to concentrate in high-quality, amenity-rich buildings that support collaboration and talent retention. As employers place greater weight on office attendance and workplace experience, building quality, location, transit access, and operational flexibility have become more important decision factors, a flight to quality that benefits premier assets while pressuring older, less competitive properties.

SEATTLE CLOSE-IN

Vacancy in Seattle Close-In rose again in the quarter, ending Q2 2026 at 28.2%, up from 28.0% the prior quarter and the highest rate in the region. The pace of increase has decelerated compared with the sharp run-up between 2020 and 2023, which points to a possible near-term rebound.

Quarterly net absorption was negative for the quarter at -247,471 SF. That compares with quarterly averages of -300,000 SF in 2025, -585,000 SF in 2024, -800,000 SF in 2023, and -365,000 SF in 2022, illustrating gradual improvement over the past several years.

Average asking rents across all office classes fell to $35.00 PSF, down 0.5% for the quarter and 6.8% year-over-year. With vacancy still elevated, asking rates are expected to stay soft in the near term.

The Seattle CBD vacancy rate held relatively steady at 34.9%, while the average Class A rent quote slipped to $40.29 PSF from $40.60 PSF last quarter and $43.34 PSF a year ago.

EASTSIDE REVIEW

The Eastside vacancy rate ticked down slightly to 21.0% during the quarter. Net absorption totaled 248,731 SF in Q2 2026, bringing the year-to-date total to 150,510 SF. Quarterly averages for comparison: -140,000 SF in 2025, 125,000 SF in 2024, -460,000 SF in 2023, and -20,000 SF in 2022.

Quarterly leasing activity reached 604,186 SF, bringing the year-to-date total to 1.3M SF and averaging 665K SF per quarter.

Asking rents for the Eastside, including Bellevue CBD and surrounding submarkets, rose from $41.38 PSF to $41.85 PSF, a 1.1% quarterly increase and roughly 6.7% year-over-year.

Bellevue CBD’s direct vacancy rate stood at 20.3% at quarter end, with overall vacancy at 23.2%. The overall average Class A rent quote, including direct and sublease space, rose to $56.32 PSF, while the direct average Class A rent quote reached $69.27 PSF, both slight increases from the prior quarter.

PIERCE COUNTY REVIEW

Total vacancy in Pierce County was 13.8% in Q2 2026, up 30 basis points from last quarter and 40 basis points from 13.4% a year earlier.

Net absorption totaled -33,866 SF for the quarter, bringing the year-to-date total to -40,314 SF, an average of -20,157 SF per quarter. That compares with a -20,000 SF quarterly average in 2025, -6,000 SF in 2024, and -385,000 SF in 2023.

Leasing activity has been relatively steady over the past few years, averaging approximately 90,000 SF per quarter over the past three years, though activity slowed in 2026 to an average of 59,335 SF per quarter over the first two quarters.

Asking rents ended the quarter at $29.20 PSF, a slight 0.3% decline from the prior quarter.

SNOHOMISH COUNTY/NORTHEND REVIEW

Snohomish County’s overall vacancy rate ended the quarter at 11.3%, a modest increase from the prior quarter.

Net absorption was negative in Q2 2026 at -16,357 SF, though the year-to-date total remains positive at 21,574 SF.

Total leasing activity, including renewals, slowed to 177,768 SF in the first half of 2026, averaging 88,884 SF per quarter, down from quarterly averages of 215,000 SF in 2024 and 165,000 SF in 2025.

Asking rents ended the quarter at $30.86 PSF, a 1.1% decline from $31.20 PSF the prior quarter.

SOUTH KING COUNTY REVIEW

Vacancy in South King County rose to 21.7%, up 150 basis points from 20.2% the prior quarter.

Net absorption totaled -25,959 SF for the first half of 2026. The market has averaged roughly -15,000 SF per quarter over the past two years.

Leasing activity totaled 532,048 SF over the first two quarters, averaging 266,024 SF per quarter.

Asking rents remained relatively stable, increasing to $27.86 PSF.

VACANCY TRENDS

Office vacancy for multi-tenant buildings larger than 10,000 SF, excluding owner-user buildings, continued trending higher across the Puget Sound region, closing Q2 2026 at 23.4%. Conditions remain uneven by geography: Seattle posted the highest rate at 28.2%, followed by South King County at 21.7% and East King County at 21.0%.

One encouraging development has been the continued reduction in sublease availability. Sublease space totaled 4.72M SF in Q2, representing 11.7% of total available space, the lowest share since 2018 and an early sign that market conditions are beginning to stabilize, even as the broader recovery remains slow and uneven.

RENT TRENDS

Average asking rents slipped to $32.76 PSF in Q2 2026, a 0.5% quarterly decrease and 1.0% below last year. While the pace of decline has moderated compared with early 2024 and 2023, pricing is expected to remain largely flat in the near term as the market moves closer to equilibrium.

Eastside continues to command the region’s highest asking rents at $41.85 PSF, driven by recent development activity and comparatively stronger tenant demand. Seattle follows at $35.00 PSF, though it has experienced the most pronounced rent compression over the past five years, with average asking rates roughly 15% below 2021 levels.

NEW CONSTRUCTION

Development activity continued to contract, with only 123,667 SF across four projects under construction, excluding owner-user developments. That represents a 95% decline year-over-year and a 99% reduction from the 2023 peak of roughly 7.5M SF. No significant completions or groundbreakings occurred during the quarter.

Major owner-user projects under construction not included in these statistics include Amazon’s 1.0M SF Bellevue 600 development, scheduled for delivery in Q4 2026.

INVESTMENT MARKET

Investment activity for transactions exceeding $1M remained active in Q2 2026, with 32 transactions totaling $184.5M and an average price of $358 PSF. Key transactions during the quarter included 4530 12th Ave NE in Ballard/University District, acquired by Bank OZK for $78.4M ($311 PSF), and Kirkland 405 Corporate Center in Kirkland, purchased by King County for $32.6M ($509 PSF).

Buyers continue to focus on value-add opportunities where pricing adjustments create potential upside through leasing and repositioning. While transaction volume remains below historical norms, improving alignment between buyers and sellers is supporting increased activity, and investment momentum is expected to strengthen gradually through the remainder of 2026 as conditions stabilize and capital becomes more comfortable with current pricing.

Frequently Asked Questions

What is the office vacancy rate in Seattle in Q2 2026?

Puget Sound office vacancy reached 23.4% at the end of Q2 2026, a 30 basis point increase from the prior quarter, according to Kidder Mathews research. Seattle Close-In posted the highest rate in the region at 28.2%, followed by South King County at 21.7% and East King County at 21.0%. The pace of vacancy increases has slowed compared with the sharp run-up between 2020 and 2023.

How much sublease space is available in the Seattle office market?

Sublease space totaled 4.72M SF in Q2 2026, representing 11.7% of total available office space, the lowest share since 2018, according to Kidder Mathews research. The decline in sublease availability is an early sign that office market conditions may be beginning to stabilize.

What are average office asking rents in Seattle, and how do they vary by submarket?

The Puget Sound average asking rent was $32.76 PSF in Q2 2026, down 0.5% from the prior quarter and 1.0% below last year. Eastside commands the region’s highest rents at $41.85 PSF, while Seattle Close-In averages $35.00 PSF. At the individual submarket level, asking rents range from $23.28 PSF in University Place/Lakewood to $53.93 PSF in Bellevue CBD.

How much office leasing activity took place in Seattle in the first half of 2026?

Office occupiers completed 3.8M SF of lease transactions during the first half of 2026, bringing the trailing four-quarter total to 8.1M SF, according to Kidder Mathews research. Downtown Seattle generated the highest overall leasing volume at 1.6M SF, while Bellevue CBD leased 851K SF year-to-date, or 6% of its inventory base, compared with 2% in Downtown Seattle.

What is net absorption, and how did the Seattle office market perform in Q2 2026?

Net absorption measures the change in occupied office space over a period; negative net absorption means more space was vacated than newly occupied. Puget Sound posted net absorption of -46,836 SF in Q2 2026. Seattle Close-In was the weakest performer at -247,471 SF for the quarter, while East King County posted positive net absorption of 248,731 SF.

How much new office space is under construction in Seattle?

Only 123,667 SF across four projects was under construction in Q2 2026, excluding owner-user developments, a 95% decline year-over-year and a 99% drop from the 2023 construction peak of roughly 7.5M SF, according to Kidder Mathews research. Amazon’s 1.0M SF Bellevue 600 development, an owner-user project not included in these figures, is scheduled for delivery in Q4 2026.

What were the largest Seattle office sale transactions in Q2 2026?

The two largest reported sale transactions in Q2 2026 were 4530 12th Ave NE in Ballard/University District, acquired by Bank OZK for $78.4M ($311 PSF), and Kirkland 405 Corporate Center in Kirkland, purchased by King County for $32.6M ($509 PSF), according to Kidder Mathews research.

How much office investment volume occurred in Seattle in Q2 2026?

Office investment sales totaled $184.5M across 32 transactions exceeding $1M in Q2 2026, at an average price of $358 PSF, according to Kidder Mathews research. Buyers continued to focus on value-add opportunities, and improving alignment between buyers and sellers supported increased activity.

What is the outlook for the Seattle office market?

Market conditions are expected to stabilize gradually. The pace of vacancy increases has slowed, sublease availability has fallen to its lowest share since 2018, and construction deliveries are near historic lows, all of which point toward a more balanced market. Demand continues to concentrate in high-quality, amenity-rich buildings, a flight to quality that is expected to persist and benefit premier assets over older, less competitive properties.

Last updated: Q2 2026. Data source: Kidder Mathews Research Group. Compiled by the Kidder Mathews Research Group.

2Q 2026 Seattle Office Market: Key Data Points

Explore our full Seattle office market review for deeper insights into leasing trends, sale activity, and submarket performance.

• Regional Vacancy Reaches 23.4%: Puget Sound office vacancy increased 30 basis points quarter-over-quarter to 23.4%, though the pace of market softening continues to moderate.
• Leasing Activity Tops 3.8M SF in H1 2026: Office occupiers completed 3.8M SF of lease transactions during the first half of 2026, bringing the rolling four-quarter total to 8.1M SF.
• Bellevue Leads Office Demand: Bellevue CBD recorded 851K SF of leasing activity year-to-date and leased 6% of its inventory base, outperforming Downtown Seattle’s 2% leasing rate.
• Construction Pipeline Near Historic Lows: Only 123,667 SF of office space was under construction across four projects, representing a 95% year-over-year decline in development activity.
• Sublease Availability Falls to Lowest Level Since 2018: Sublease space declined to 4.72M SF, accounting for just 11.7% of available office inventory, an early sign of improving market fundamentals.
• Office Investment Volume Reaches $184M: Seattle-area office investment sales totaled $184.5M across 32 transactions during Q2 2026, reflecting improving alignment between buyers and sellers.

Submarket Statistics