Seattle-Tacoma Industrial Market Report

Softer conditions persist amid ongoing speculative development. Within Seattle’s small-bay segment, leasing activity has remained relatively consistent with prior years. However, vacancy continues to rise as tenants either relinquish space or relocate into post-2000 construction. Conditions in the 50,000- to 200,000-square-foot range are similar, though demand weakened more materially in early 2026, as ongoing tenant consolidations outweighed limited expansions to raise availability. Tenants are nevertheless more actively pursuing midsized blocks than either smaller or larger alternatives. Properties exceeding 200,000 square feet experienced a modest rebound in leasing activity during 2025, though that momentum has tapered in early 2026. This broad-based softening aligns with declining cargo volumes at the Northwest Seaport Alliance, where container throughput has trailed year-ago levels throughout the early months of 2026, largely due to a drop in imports. As a result, persistent speculative completions will put further upward pressure on vacancy in the near term.