Seattle Office Market
The Puget Sound office market experienced a 70-basis-point increase in vacancy rates in Q1 2025, reaching 21.9%, with a net negative absorption of 360,847 square feet. Following a slowdown at the end of 2024, more direct space entered the market in Q1 2025. Steady sublease availability suggests that sublease expirations were not the main driver of increased direct space. Rents in the Puget Sound market rebounded in Q1 2025, with average asking rates rising to $44.50 per square foot, a year-over-year increase of 2.0%.
Seattle Industrial Market
The year started with 21% of the supply under construction delivering, but much of it was built to suit. Fred310 – Bldg C delivered 1.2 million square feet with Floor & Décor ready to move in. Following a 38% surge between Q3-Q4 2024, in Q1 sublease availability increased by 12%, mainly due to four large blocks of at least 100,000 square feet entering the Tacoma/Fife submarket. Landlords have maintained steady rates in response to the recent slowdown in leasing activity. Tenants may need time to feel confident making long-term decisions given the current economic conditions.