Seattle-Tacoma Industrial Market Report

Import drop fuels bulk space givebacks; small bay stays tight. Recently enacted tariffs have added volatility to the Seattle-Tacoma industrial market. Port volumes fell 17.3 percent year over year in May 2025, coinciding with over 2 million square feet of net move-outs in the second quarter. Most of the returned space came from large-format users in the South End and Tacoma, pushing big-box vacancy above 11 percent. While stronger trade flows and policy clarity could lift demand later in the year, a prolonged import decline would likely weigh on port-adjacent leasing. With Tacoma set to add over 4 million square feet of space this year, vacancy is expected to remain elevated, though fewer completions elsewhere should help limit upward pressure. Meanwhile, small-bay properties are likely to remain more stable, as fewer move-outs and limited new supply kept vacancy below 5 percent in June. This dynamic should help sustain tighter conditions in the Eastside and North End, where leasing is buoyed by advanced manufacturing and last-mile tenants.