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The Seattle Market Headlines Are Loud. The Data Tells a Quieter and Better Story.

By Spencer Marona, Managing Partner, Seattle

Seattle’s office vacancy just hit an all-time high. 16.7% across the metro and 35.6% in the Seattle CBD as of Q2 2026. Downtown trophy towers have shed an estimated $3.7B in assessed value since 2022. Those numbers are real, and I won’t try to argue them away.

However, after spending the better part of a month reading every Seattle and Eastside report I could get my hands on, I’ve come to a different conclusion than most of the headlines.

Here are four reasons why I am bullish on the Seattle market:

1. The biggest tech tenants in the world keep choosing this region.

If Seattle were truly a falling knife, the smartest, most disciplined capital allocators on earth wouldn’t be quietly increasing their footprints here. They are.

A short list of what has been signed in the last twelve months:

  • Anthropic is negotiating a 120,000 SF lease in South Lake Union, where it already has offices.
  • Apple is in advanced talks for approximately 195,000 SF at Arbor Blocks West in South Lake Union — what brokers say will be the largest new office lease in Seattle since before the pandemic.
  • OpenAI more than quadrupled its Seattle-area footprint, expanding at City Center Plaza in Downtown Bellevue by roughly 223,000 SF (~272,000 SF total). The company is now the tower’s anchor tenant, and Databricks is reportedly negotiating for the rest.
  • Uber signed a long-term lease for multiple floors at the newly delivered Four106 tower in downtown Bellevue (~168,700 SF), more than doubling its Seattle-area presence.
  • Microsoft signed multiple renewals and new commitments at Redmond Town Center totaling more than 350,000 SF over the past few quarters.
  • Meta signed nearly 145,000 SF at Willow Creek Corporate Center in Redmond. *Meta announced 1,395 jobs in King County were being cut last month, primarily due to AI, and the optics are not great with Mark Zuckerberg parking his mega-yacht this week in South Lake Union. However, Meta is not going anywhere, and, like many tech giants, it often hires as fast as it lets employees go, depending on its business initiatives and competitive landscape.
  • Providence Health & Services took roughly 260,000 SF at the former Boeing Longacres campus in Renton — the largest new office lease in the region in 2026.
  • General Motors, Snap, Foster Garvey, Morrison Foerster, ServiceNow, CrowdStrike, Slalom, Wilson Sonsini, and Community Health Plan of Washington all signed substantial new deals or renewals.

Zoom out, and the national pattern is even more telling. CBRE’s latest tracking shows that Silicon Valley, Manhattan, San Francisco, Boston, and Seattle collectively doubled their tech-related leasing volumes between 2023 and 2025. In Q1 2026, the tech sector accounted for 22.7% of total U.S. office leasing volume, up sharply from 15.3% a year earlier. CBRE now expects 2026 leasing activity nationally to surpass 2019 pre-pandemic levels.

What is driving it? Record venture capital deployment into AI: about $578 billion across American AI companies over six years, and roughly 80% of that flowing initially through the Bay Area and Seattle. NVIDIA, xAI, OpenAI, Anthropic, Meta, and Google have all announced AI-related expansions in our region. The narrative that “AI will kill office demand” has reversed in record time. In the markets where AI talent is concentrated, and Seattle is one of five on that very short list, AI is fueling office demand, not destroying it.

There is a reason these companies keep choosing Seattle and Bellevue, even though, on paper, they could go anywhere. They cannot recruit the engineering talent they need to win the next decade without being here.

2. Bellevue and the Eastside are already in recovery. Flight-to-quality is happening in real time.

I want to be careful here, because I think a lot of people read “Seattle office market” and picture one homogenous downtown. The reality is that performance varies dramatically by submarket and building vintage, and several of our submarkets are already showing what recovery looks like.

City Center Plaza in Downtown Bellevue — the former Microsoft building that was fully vacant for about two years — is now nearly fully leased after a thoughtful repositioning. Asking rents there are in the mid-$50s per SF on a triple-net basis. That is a near-zero-to-nearly-full lease-up in under 24 months. That is not a market in distress; that is a market in transition.

The 4 & 5 Star segment in Bellevue, which saw the sharpest rent declines in recent quarters, is now posting modest positive rent growth again. The Eastside, which historically accounted for about one-third of regional office sales volume, captured nearly two-thirds of total sales in 2025 — over $950 million in transactions, a 16% year-over-year jump and roughly six times the 2023 low. Preylock paid $225 million for One Esterra Park (~$912/SF). Spring District blocks in Bellevue traded in the $ 800-plus-per-square-foot range.

Even Downtown Seattle, which has the heaviest narrative load, posted positive net absorption in Q1 2026, which was its first positive quarter since Q1 2022. The pace of increases in vacancies has slowed materially. CoStar’s forecast for the CBD shows vacancy peaking at 31.8% later this year, then declining steadily to approximately 29.3% by 2030. The CBD itself is forecast to flip to positive net absorption in 2026 and stay there.

The point is not that every submarket is back. The point is that recovery has already begun in the highest-quality assets and strongest submarkets. The rest of the metro follows, with a lag.

3. The economics now favor tenants and capital, which is how recovery begins.

The textbook setup for a market bottom looks roughly like this: face rents flatten, effective rents are well below face rents due to concessions, owner-users start buying because the acquisition basis is below replacement cost, and patient institutional capital starts circling. Look at Seattle right now:

  • Face rents are flat to modestly positive. Market asking rent growth is +0.8% YoY overall. The CBD posted +0.5%. After several years of decline, the bleeding has stopped.
  • Effective rents are deeply discounted. Tenant improvement allowances above $100/SF for first-generation space are now common. One month of free rent per year of the lease term is the new norm, roughly double the levels of the 2010s.
  • Seattle remains structurally cheaper than peer tech markets. Rents for 4 & 5 Star office in Seattle are roughly one-third lower than in San Jose. That spread has persisted for more than a decade and is exactly why Bay Area firms keep opening offices here.
  • Owner-users are stepping in. This buyer group accounted for about 20% of sales volume over the past year — a meaningful increase from historical norms. King County bought 1110 Harvard from Optum. Google purchased the ~80,000 SF Marymoor Technology Building in Redmond for $445/SF, acquiring a building it already occupied. When sophisticated corporate buyers conclude that ownership is cheaper than leasing, you are very near the bottom.
  • Pricing is stabilizing. The average price per SF for transactions is $427 today, with cap rates averaging 7.7%. CoStar’s market sale price index is up 3.8% year over year. Total trailing 12-month sales volume rebounded to $1.5 billion in the office sector and $2.3 billion in the industrial sector; the industrial figure is actually above the five-year average.
  • Industrial is signaling the same thing one quadrant over. Amazon paid roughly $220 million for Ashley Furniture’s 1.1 million SF facility in Spanaway. The market is rewarding with a well-located, well-leased product. Cap rates on fully leased modern industrial properties are compressing and clustering in the mid-to-high 5s, which is a difference from 2023

This is what the floor looks like in real time. It rarely feels like a floor when you’re standing on it, because the news cycle is always running months behind the pricing data.

4. The Seattle fundamentals have not changed, and those are the only things that matter.

Markets are won and lost on talent, capital, and corporate gravity. Seattle has all three in abundance, and a few important demographic tailwinds working in our favor.

  • Population: 4.2 million. 13th-largest metro in the U.S. and growing at 1.2% annually, back to its 2010s trend after a brief dip.
  • Income: $116,000 median household income. Roughly 37% higher than the national median.
  • Education: over half the adult population holds at least a bachelor’s degree.
  • Workforce: the 35-49 prime working-age cohort grew 2.9% over the past year. This is more than 2x the national rate. Net population growth is now driven by international migration; we are attracting highly educated workers that other regions are losing.
  • Information sector location quotient: 3.7. Seattle has nearly four times the concentration of information-sector jobs as the typical U.S. metro. The 10-year information-sector job growth here has been 3.4% annually versus 0.1% nationally. The five-year forecast is 1.7% annually versus essentially zero for the country.
  • Two of the world’s largest technology companies, Microsoft and Amazon, are headquartered here, supported by major AI, cloud, biotech, aerospace, satellite, defense, and logistics operations from NVIDIA, xAI, OpenAI, Anthropic, Meta, Google, Blue Origin, SpaceX, Amazon Leo (formerly Project Kuiper), and many others.
  • Unemployment is nearly 4%. Down from the 2010s average.

A recent global innovation report put Seattle on the very short list of cities driving the global tech economy, while specifically flagging a shortage of investment-grade office space as a bottleneck for the next expansion. Read that sentence again and ask whether it sounds like a market in structural decline, or a market temporarily over-supplied while demand catches up.

I’d argue forcefully that it’s the second one, despite the new progressive taxes implemented by the newly elected socialist Seattle Mayor Katie Wilson being behind.

What I Watch And What I’d Tell a Tenant, Owner, or Investor Today

I won’t pretend Seattle has nothing to work through. Office-using job growth has slowed. Hybrid work is real. A meaningful chunk of older, commodity downtown product will need to be repurposed or removed before that inventory clears. Boeing layoffs hit aerospace. Population growth depends heavily on international immigration. These are real headwinds, and I’m not asking anyone to ignore them.

But “temporary” doesn’t mean “tomorrow.” It means the conditions creating today’s vacancy: speculative oversupply, hybrid normalization, and a tech-sector pause. All are reversing at the same time, while the demand drivers that built Seattle into a top-five U.S. tech market remain firmly in place.

For tenants, this is the most leverage you have had in a decade. Concession packages have not been this generous since shortly after the Great Recession, more than 15 years ago. If you have a 2027 or 2028 expiration, you are negotiating in a window that is already closing for the highest-quality buildings.

For owners, the playbook is reinvestment and repositioning in the right submarkets, plus disciplined patience. The City Center Plaza story is the template. Tenants are still touring and signing new leases and renewals. They want modern, transit-connected amenities and products.

For investors and owner-users, the basic math is the best it has been in this cycle, particularly on infill and Eastside products. The trophy products in the CBD are going to be a longer story, but durable income plays, and well-underwritten basis plays are clearing.

And for the Seattle market overall: I think 2026 is the inflection year, 2027 is the recovery, and 2028 is the year when everyone wishes they had moved sooner.

Headlines tell stories. Data tells the truth. The headlines about Seattle right now are loud, and they are not wrong about the cyclical pain. But the underlying data, the construction pipeline, the tech leases, the tenant flight to quality, the basic economics, and the fundamental Seattle story — tell me the next chapter has already begun.

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