Seattle office vacancies hit record highs

Seattle’s office market is falling faster than in any other major US city, while vacancies have pushed to record highs, especially downtown. Additionally, with so many vacancies, there is no new office construction.Recent market data show the sharpest drops in office usage, and pricing concentrated in Downtown Seattle, Belltown, and Queen Anne, where demand has weakened most dramatically. Metro-wide asking rentshaveslipped year over year, but the central business district has been hit hardest.

Regional office vacancy sits at 17.3 percent and is projected to peak around 18.3 percent in 2026, even as some buildings are removed from inventory through planned demolitions and conversions.And while the regional figure is already elevated,downtown’snumbers look far worse.According to a new CoStar analysis,downtown vacancy is nearing 35 percent in Q2 2025, reported bySeattle Red.

With tenants holding leverage, landlords have increasingly resorted to aggressive incentives, bigger tenant-improvement budgets, longer free-rent periods, and more flexible terms. Analysts point to Seattle’s heavy reliance on tech as a key reason the market is sliding faster than peers. When large tech employers downsize or reduce office footprints, Seattle feels it more acutely than more diversified cities.

Recent job cuts have added fresh stress to the demand outlook. Amazon cut 2,303 corporate jobs in the state, concentrated around Seattle and Bellevue.Microsoft’s2025 reductions include a large Washington-state layoff notice and totals cited by some outlets that put local cuts above roughly 3,100 for the year so far. Other major firms have also trimmed roles in the region, including Meta, Oracle, and Salesforce.Metarecently walked away from future growth plans in nearby Bellevue, surrendering its rights to five development sites in the mixed-use neighborhood, just as Washington Democrats press ahead with a major new payroll tax aimed at the very jobs the region is struggling to keep.

Last week, self-identified socialist Rep.Shaun Scottand Sen. Rebecca Saldaña rolled out the “Well Washington Fund,” which would impose a 5 percent payroll excise tax applied to theportionof employer payroll expenses above $125,000 per employee.