Seattle-Tacoma office vacancy falls to 18.6% as construction stalls

Seattle-Tacoma office vacancy fell to 18.6% from a peak of 19.7% in the second quarter of 2025, according to Marcus & Millichap. Tenants absorbed about 2.8 million square feet on net in the year ended in June.

Only two properties totaling 35,000 square feet are scheduled for completion in 2026, according to Connect CRE's Oct. 26 account of the report. The roughly 1 million-square-foot Bellevue 600 Tower 1, an Amazon project, is no longer expected to deliver in 2026.

Marcus & Millichap's 2026 forecast calls for vacancy to fall to 18.4% and average asking rent to rise 0.8% to $29.30 a square foot. Downtown rents may remain under pressure.

For lenders and allocators with Puget Sound exposure, the report's variation by property class and submarket means a position sized to the 18.4% metro vacancy can still face falling rents downtown.

Joel Deis, a senior managing director and market leader at Marcus & Millichap, said improving absorption and a "nearly empty development pipeline" support the decline in vacancy. The thin pipeline is the same argument the firm made in its October construction outlook, which, as Private Wealth Daily previously reported, saw limited new commercial construction extending rent growth.