"State of play: Elliott Krivenko, senior market analyst at CoStar, tells Axios the steep drop in leasing demand and rent is already undermining valuations, and true recovery may still be years away. By the numbers: The office vacancy rate for the region stands at 17.3% with about 43 million square feet listed for sale or lease, per CoStar, and it's projected to peak at 18.3% in 2026."
"Krivenko attributes Seattle's declines to weak demand due to the downsizing of tech companies and the prevalence of entrenched remote work. "The market's heavy reliance on tech means layoffs and footprint reductions hit harder here than in more diversified cities," says Krivenko. Landlords are responding with aggressive concessions: larger tenant improvement budgets, extended free rent and more flexible terms - especially in high-end offices, per CoStar."
Seattle's office vacancy rate is 17.3% with about 43 million square feet listed for sale or lease and projected to peak at 18.3% in 2026. Average asking rent fell 0.7% from Q3 2024 to Q3 2025. Rent declines have been steepest in the central business district, including Belltown and Queen Anne, where rent dropped about 2% year-over-year. Downtown office vacancy neared 35% in Q2 2025. Weak demand is driven by tech company downsizings and entrenched remote work. Landlords are offering larger tenant improvement budgets, extended free rent, and more flexible terms. Vacancy is expected to peak next year with a slow recovery possible in 2027, contingent on increased large lease signings and tech hiring.
Read at Axios
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