Seattle Retail Market Report

The following reflects Seattle retail market conditions as of Q3 2026.

Puget Sound retail fundamentals held relatively steady through the third quarter, with positive net absorption continuing even as leasing activity became more measured. Retailers remain selective, favoring established locations and smaller, more efficient store formats while slower employment growth and elevated consumer costs weigh on decision-making. Performance remains uneven across the region, with tighter conditions in several suburban counties and higher vacancy in King County.

Vacancy

Direct vacancy held at 3.9% in Q3 2026, up slightly from 3.8% a year earlier, while total availability stood at 4.0%. King County recorded the highest direct vacancy at 4.8%, followed by Kitsap County at 4.4%, while Thurston (3.0%), Pierce (2.9%), and Snohomish (2.8%) Counties remained at or below 3.0%. The gap underscores tighter retail conditions across much of the suburban market.

Market Trends

Average asking rents were $23.16 per square foot in Q3, unchanged from a year ago and slightly below the prior quarter. Low vacancy continues to support rents, but slower leasing and greater retailer selectivity have limited meaningful rent growth. Well-located space with established traffic and favorable demographics remains best positioned to hold pricing.

Development Activity

Deliveries picked up in Q3, with 215,000 SF of new retail space completed, lifting year-to-date completions to approximately 306,000 SF. Vacancy remained stable, indicating the new supply has so far been absorbed without materially disrupting the market. The construction pipeline has narrowed to approximately 176,000 SF, which limits the potential for significant supply pressure in the near term.

Market Demand/Net Absorption

Net absorption was positive 231,000 SF in Q3, bringing the year-to-date total to approximately 466,000 SF. All three quarters of 2026 have posted positive absorption, a meaningful reversal from the occupancy losses of much of 2025. Leasing volume moderated during the quarter, however, pointing to a market where demand remains active but increasingly selective.

Investment Activity

Investment activity remains measured, with sales volume below the stronger levels earlier in the cycle but improved from the market’s 2023 low. Investors continue to favor well-leased suburban centers and necessity-based retail, particularly grocery-anchored properties, as illustrated by the $69.5 million sale of Lakeland Town Center in Auburn in the third quarter. Private investors and owner-users remain active, while liquidity is more limited for urban properties, older big-box assets, and properties requiring significant lease-up or redevelopment. Limited new construction and low vacancy support investment fundamentals, although financing constraints and broader economic uncertainty are likely to keep transaction activity selective.

Frequently Asked Questions

What is the retail vacancy rate in Seattle in Q3 2026?

The direct retail vacancy rate in the Seattle market was 3.9% in Q3 2026, compared with 3.8% one year earlier, according to Kidder Mathews research. Vacancy remained low and largely unchanged during the quarter. (Data source: CoStar)

Which county has the highest retail vacancy in the Seattle market in Q3 2026?

King County had the highest direct retail vacancy at 4.8% in Q3 2026, followed by Kitsap County at 4.4%, according to Kidder Mathews research. Snohomish County recorded the lowest rate at 2.8%, with Pierce County at 2.9% and Thurston County at 3.0%. (Data source: CoStar)

What is the retail availability rate in Seattle in Q3 2026?

The total retail availability rate in the Seattle market was 4.0% in Q3 2026, according to Kidder Mathews research. By county, availability was 4.3% in King, 4.4% in Kitsap, 3.8% in Pierce, 3.7% in Snohomish, and 3.0% in Thurston. (Data source: CoStar)

What are average retail asking rents in Seattle in Q3 2026?

Average retail asking rents in the Seattle market were $23.16 per square foot in Q3 2026, unchanged from a year ago and slightly below the previous quarter, according to Kidder Mathews research. Limited vacancy continues to support rents, while slower leasing and greater retailer selectivity have kept meaningful rent growth in check. (Data source: CoStar)

What was retail net absorption in Seattle in Q3 2026?

Seattle retail net absorption was positive 231,000 SF in Q3 2026, bringing the year-to-date total to approximately 466,000 SF, according to Kidder Mathews research. Net absorption measures the change in occupied space over a period, so a positive figure means more space was occupied than vacated. All three quarters of 2026 have recorded positive absorption, a reversal from the occupancy losses experienced during much of 2025. (Data source: CoStar)

How is retail leasing demand in Seattle in Q3 2026?

Retail leasing volume in the Seattle market moderated in Q3 2026, according to Kidder Mathews research, even as net absorption remained positive. Demand remains active but increasingly selective, with retailers favoring established locations and smaller, efficient store formats. (Data source: CoStar)

How much new retail space was delivered in Seattle in Q3 2026?

About 215,000 SF of new retail space was delivered in the Seattle market in Q3 2026, bringing year-to-date completions to approximately 306,000 SF, according to Kidder Mathews research. Vacancy remained stable, indicating the new supply has so far been absorbed without materially disrupting market conditions. (Data source: CoStar)

How much retail space is under construction in Seattle as of Q3 2026?

Approximately 176,000 SF of retail space was under construction in the Seattle market as of Q3 2026, according to Kidder Mathews research. The construction pipeline has narrowed, which limits the potential for significant supply pressure over the near term. (Data source: CoStar)

What notable retail property sold in Seattle in Q3 2026?

Lakeland Town Center in Auburn sold for $69.5 million in Q3 2026, according to Kidder Mathews research. The sale illustrates continued investor demand for well-leased suburban centers and grocery-anchored retail. (Data source: CoStar)

What types of retail properties are investors targeting in the Seattle market in Q3 2026?

Investors in the Seattle market continue to favor well-leased suburban centers and necessity-based retail, particularly grocery-anchored properties, according to Kidder Mathews research. Liquidity is more limited for urban properties, older big-box assets, and properties requiring significant lease-up or redevelopment. Sales volume remains below earlier-cycle levels but improved from the market’s 2023 low. (Data source: CoStar)

What is the outlook for Seattle retail following Q3 2026?

According to Kidder Mathews research, Seattle retail fundamentals remain supported by low vacancy and limited new construction, with the narrowed pipeline of approximately 176,000 SF limiting near-term supply pressure. Financing constraints and broader economic uncertainty are likely to keep transaction activity selective, and retailers remain selective in their expansion plans as slower employment growth and elevated consumer costs influence decision-making. (Data source: CoStar)

Last updated: Q3 2026. Data source: CoStar. Compiled by the Kidder Mathews Research Group.

Q3 2026 Seattle Retail Market: Key Data Points

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

• Direct Vacancy: Direct vacancy held at 3.9% in Q3 2026, compared with 3.8% one year earlier, while total availability was 4.0%.
• County Spread: King County recorded the highest direct vacancy at 4.8%, while Snohomish County was the lowest at 2.8%.
• Asking Rents: Average asking rents were $23.16 per square foot, unchanged year over year and slightly below the previous quarter.
• Net Absorption: Net absorption was positive 231,000 SF in Q3, bringing the year-to-date total to approximately 466,000 SF.
• Deliveries and Pipeline: New deliveries totaled 215,000 SF in Q3 (approximately 306,000 SF year to date), and roughly 176,000 SF remains under construction.
• Investment Activity: Lakeland Town Center in Auburn sold for $69.5 million, underscoring investor demand for grocery-anchored suburban retail.

Submarket Statistics