Where the market sits
Puget Sound industrial is working through the space built during the 2021-2023 logistics run. Published mid-2026 vacancy figures range from about 9.5% to 12.5%, and the spread itself tells the story: the gap comes from inventory definitions and how each survey treats new speculative buildings. Our composite read is 10-11% vacant with availability in the 12-13% range, the highest in roughly two decades. Every source agrees on direction: vacancy is up 100-300 basis points year over year, and net absorption has been negative for two straight quarters, at roughly 1-2 million square feet of givebacks over twelve months.
The weakness is concentrated. Pierce County carries the region's highest vacancy, near 13%, where most of the large speculative product sits. The Eastside is around 7.5% and tightening, and Bellevue's small industrial base is under 2% vacant with nothing built in a decade.
Supply and demand
Roughly 3 million square feet delivered in the first half of 2026 and accounts for most of the vacancy increase; trailing-year deliveries are near 5 million. About 1.5-2 million square feet remains under construction, the large majority speculative. Starts have slowed, so the pipeline thins from here.
Demand has moved down-market. The average lease signed in the second quarter was under 10,000 square feet, a record low, and no lease over 150,000 square feet closed in the first half. Manufacturing, aerospace, and defense users have taken a larger share of leasing while port-driven distribution demand has softened. Container volumes through the Seattle and Tacoma harbors are down roughly 11% year over year through July, with full imports off about 14%, partly a comparison against 2025 volumes pulled forward ahead of tariffs.
Rents, pricing, and capital
Asking rents are flat to modestly up. The blended regional rate sits in the $1.05-1.10 per square foot per month range, flat to up about 2% year over year, with the Eastside near $1.90, the highest in the region. Concessions and sublease space, about 12% of availability, mean effective rents on older commodity buildings have moved less than asking figures suggest.
Capital is still active. Trailing twelve-month sales are near $3 billion, above the five-year average of roughly $2 billion, with cap rates in the 5.75-6.5% range and average pricing around $210-220 per square foot. Owner-users and private buyers of smaller multi-tenant buildings have been the steadiest bidders; leased large-box assets still trade, while vacant or near-term rollover buildings price at wider yields.
What this means for owners
For family owners of older, well-located buildings in Kent Valley, the Duwamish, or the Eastside, the in-place tenant is the asset. A renewal at a fair rent beats chasing top-of-market and absorbing downtime against the current availability overhang. For owners weighing a sale, the spread between leased and vacant pricing is wide enough that lease-up before marketing usually pays for itself. For families holding land in the South Sound, we expect the speculative overhang to take several more quarters to clear, and patience costs less than a 2026 start.
CMRE Partners analysis of its own data and experience, publicly available market research from national and regional sources, together with public data from the Port of Seattle, the Downtown Seattle Association, and Washington State agencies. Figures are CMRE Partners' composite ranges as of August 2026. General information only. Please contact CMRE Partners to discuss a specific matter.
