Measured Moves, Longer Commitments, and a Focus on Submarkets Shape South Sound Office Trends
The South Puget Sound office market is settling into a new rhythm, one marked by clarity, recalibrated expectations, and renewed confidence. With Q2 vacancy at 8.19%, the region is demonstrating stability in fundamentals and a surge in strategic movement across both leasing and investment segments.
Average asking rents remain $30.00 PSF Full Service, while pricing on trades has eclipsed $300 PSF for owner/user transactions while Value Add buyers still search for the bottom of the market. Investment sales are improving, we simply couldn’t support transactions twelve months ago that are getting done today, notably supported by a steady 8.0% average cap rate.
“What we’re seeing now is not just stabilization, but reactivation,” says Will Frame, EVP at Kidder Mathews. “The right users are leaning in, and strategic landlords are meeting the moment with flexible deal-making and realistic pricing. That’s a recipe for long-term strength.”
Secondary markets like Tacoma are outpacing their primary peers, as users seek locations closer to where employees live. Frame notes that this shift—away from centralized hubs and toward a “hub-and-spoke” model—is gaining traction, particularly among national credit tenants targeting smaller footprints between 3,000 and 10,000 SF.
With leasing and sales timelines tightening, pricing stabilizing, and user demand becoming more deliberate, the South Sound office market is positioned for a year of recalibrated momentum. Confidence is returning, but this time, it’s rooted in data, discipline, and a clearer understanding of where work fits into the future.
South Puget Sound 2Q 2025 Office Insights
| Vacancy | 8.19% |
| Total SF | 43,634,498 |
| Vacant SF | 3,575,052 |
| Average Asking Rent PSF Full Service | $30.00 |
| Average Months to Lease | 4 – 8 Months |
| Average Sale Price PSF | $127 |
| Average Market Cap Rate | 8.00% |
| Months to Sale – Owner/User | 3 – 12 Months |
| Months to Sale – Stabilized | 3 – 9 Months |
The information in this update was composed by the Kidder Mathews healthcare and office brokerage team of Will Frame, Drew Frame, and Ryan Kershaw.
Data source: CoStar
About the Frame Team
As members of the Kidder Mathews Healthcare and Office groups, Will Frame, Drew Frame, and Ryan Kershaw are experts in healthcare and office services, specializing in landlord and tenant representation, as well as sales, including investment and owner/user. The team has completed over $243,000,000 in sales in the last 24 months and actively represent more than 7 million square feet of property. For more information, visit kmteamframe.com.
About Kidder Mathews
Kidder Mathews is the largest fully independent commercial real estate firm in the Western U.S., with over 900 professionals in 20 offices across Washington, Oregon, California, Idaho, Nevada, and Arizona. We offer a complete range of brokerage, appraisal, asset services, consulting, and debt & equity finance services for all property types. Kidder Mathews averages over $9 billion in transaction volume, manages more than 58 million square feet of space, and conducts 2,400 appraisal, consulting, and cost segregation assignments annually. For more information, visit kidder.com.
Read the full report at the link below.
Contact
Will Frame, Executive Vice President
Drew Frame, Senior Vice President
Ryan Kershaw, Investments Specialist
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