Seattle’s office vacancy rate reached 33.3 percent in the first quarter of 2026, significantly higher than the national average of 20.2 percent.
One of Seattle's most recognizable office towers is set to be sold at a staggering loss, underscoring the ongoing decline of the city's downtown office market as employers cut jobs, relocate workers, and leave millions of square feet of office space vacant.
According to Bloomberg, Blackstone is selling Seattle's 44-story US Bank Center to Spear Street Capital for approximately $280 million, a price roughly 54 percent below the $612 million the investment giant paid for the property in 2019. The deal, which has not yet closed and remains contingent on financing, is the latest sign that major commercial real estate investors are increasingly willing to accept steep losses rather than continue holding struggling office properties.
The sale comes as Seattle has emerged as one of the worst-performing office markets in America. A recent Cushman & Wakefield report found Seattle's office vacancy rate reached 33.3 percent in the first quarter of 2026, significantly higher than the national average of 20.2 percent. The city's vacancy rate now exceeds San Francisco's 31.6 percent and Los Angeles' central business district at 31.7 percent. The report also found that Seattle continued to post negative net absorption, meaning more office space is being vacated than leased.
The US Bank Center sale highlights just how dramatically office values have collapsed since the pandemic. According to Bloomberg, office values in central business districts nationwide have fallen an average of 44 percent over the past five years, citing data from MSCI. Seattle's decline has been even more severe. "We believe this sale is the most optimal outcome for our investors and all parties involved," a Blackstone spokesperson told Bloomberg. "Fortunately, US traditional office represents less than 1.5% of our portfolio, and we effectively wrote off this investment in 2023."
The fact that Blackstone wrote off the investment years ago illustrates how little confidence major institutional investors have had in a downtown Seattle recovery. Seattle's struggles stand in sharp contrast to what is happening elsewhere in the region. Bloomberg noted that while downtown Seattle continues to suffer from elevated vacancy rates, demand is growing east of the city, particularly in Bellevue and other Eastside markets where large employers and artificial intelligence companies are expanding.
That shift mirrors warnings from Downtown Seattle Association President Jon Scholes, who recently told KIRO 7 that Seattle lost more than 13,000 jobs in 2025 alone. Scholes blamed the city's growing tax burden and rising employment costs, arguing that companies are increasingly moving jobs to Bellevue and other neighboring cities. Among the policies cited by business leaders is Seattle's new 5 percent Social Housing Tax on employee compensation exceeding $1 million, which took effect this year on top of existing payroll and business taxes.
Blackstone itself appears to be following the same trend. While preparing to sell the US Bank Center at a massive loss, the firm has been investing east of Seattle. Bloomberg reported that Blackstone acquired 40 percent stakes in Bellevue office properties leased to Meta Platforms last year, valuing those buildings at approximately $545 million.
Downtown Seattle office towers are losing hundreds of millions of dollars in value while investors direct capital toward Bellevue. Amazon, which once fueled Seattle's downtown office boom, has cut thousands of jobs across multiple rounds of layoffs in recent years. Meta has announced cuts affecting nearly 1,400 Washington workers as part of a broader restructuring effort. Starbucks has also reduced its Seattle-area corporate workforce through multiple rounds of layoffs as the company reshapes its operations.
Those job losses carry consequences far beyond individual employers. Every worker who leaves an office tower represents less demand for restaurants, retail shops, transit systems, parking garages, and commercial real estate. Downtown Seattle Association data shows worker activity remains well below pre-pandemic levels even as tourism and event attendance have improved.
When it opened in the late 1980s, the US Bank Center served as a centerpiece of a thriving downtown economy, housing upscale retailers, restaurants, a movie theater, and a well-known FAO Schwarz toy store famous for its giant bronze teddy bear outside the entrance. In recent years, ownership attempted to revive the property by renovating its atrium into Cedar Hall, a food-and-gathering space designed to attract visitors back downtown following the pandemic. Yet even those efforts were not enough to prevent one of the largest office investment losses in Seattle history.
The tower's sale also raises questions about the value of other downtown office assets. Bloomberg reported that Blackstone continues to own the DocuSign Tower in Seattle, where a lender is currently marketing an $82.3 million slice of the building's $388 million mortgage debt. While Blackstone remains current on the loan, the offering highlights the continued financial stress facing downtown office properties.
Seattle, which was once viewed as one of America's strongest technology-driven office markets, now has some of the highest vacancy rates in the nation. Office values are being written down by hundreds of millions of dollars, and investors are increasingly looking east toward Bellevue and out of state rather than toward downtown Seattle.
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