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Market Report

Seattle-Tacoma Office Market Report

2023 Investment Forecast

Development Focused in Downtown Seattle and the Eastside
as Investors Look North and South

Less construction aids stretches outside central Seattle. Tacoma and the Southend have emerged as bright spots amid a broadly beleaguered Seattle office sector. Both submarkets posted positive net absorption and contracting vacancy last year, diverging from metrowide trends. A key differentiator has been minimal construction, as development has been focused downtown and on the Eastside. That behavior holds this year, with the bulk of project deliveries slated for Lake Union, Bellevue and Redmond. These completions are designed to meet long-term, tech sector demand, although the new supply is ill-timed with the current economic cycle. While prominent leases were recently signed here by major firms, such as Meta, Amazon and Snap, immediate space needs will be outweighed by record arrivals. Some of these firms have also been relinquishing floorplans in other U.S. markets, which accentuates the potential risk for similar actions in Seattle. Operations should be more stable among Class B/C space as general economic concerns prompt many companies to look for cost-effective layouts. Rents in the Northend, Southend and Tacoma are about 30 percent below the CBD and Eastside metrics.
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