Seattle-Tacoma Retail Market Report

Retailer demand aided by burgeoning office sector recovery. Local vacancy will remain at least 100 basis points below all other major West Coast markets this year, as a negligible injection to stock limits supply-side pressure. Coinciding with this tepid pipeline, net absorption in the office sector is expected to return to positive territory in 2024, potentially motivating more retail tenants to expand and capitalize on returning midweek foot traffic. The Eastside stands out in this regard, with Amazon and other tech companies opening new offices here late last year amid a push to bring workers back to in-person attendance. However, local retail vacancy has been the tightest in the metro, at 2.2 percent entering 2024, reflecting a shortage of available spaces in the submarket. This restraint could shift some expanding tenants to Downtown Seattle, where midweek foot traffic also appears to be on the upswing. At the start of the year, more than 15 office-using firms were slated to move into local floor plans over 10,000 square feet. This could kickstart space demand from retailers in the CBD, after it posted seven consecutive quarters of net relinquishment moving into 2024.