Where the market sits
The Puget Sound office market has stopped getting worse. That is the most useful thing to say about it as of August 2026. Newmark's Q2 2026 report puts regional vacancy at 23.3% with availability at 26.2%, both down slightly from the prior quarter, and records positive absorption for the year to date after three years of givebacks. Kidder Mathews shows 23.4% and Colliers 26.0% for the same quarter, the spread reflecting different building sets and how sublease space is counted. CoStar's August 2026 data, which tracks a broader inventory including owner-occupied and smaller buildings, has vacancy at 17.2%, essentially flat year over year, with availability drifting down to roughly 42 million square feet.
The regional number hides a wide split. Cushman & Wakefield reports Downtown Seattle vacancy at 35.8% in Q2 2026, and CoStar has Seattle CBD availability at 34.6% in August. The Eastside runs around 21% vacant per Cushman & Wakefield and Kidder Mathews, and Suburban Bellevue, with its medical office base, sits near 13% per CoStar.
What is driving it
Leasing volume has returned even though headcount has not. Kidder Mathews counts 3.8 million square feet of leases in the first half of 2026, and JLL reports Q2 leasing in Downtown Seattle up 55% year over year. The commitments are concentrated in new or renovated buildings: OpenAI's expansion at City Center Plaza, Uber and Databricks at Four106 in Bellevue, Anthropic at Dexter Yard, and Foster Garvey, SoFi and Rippling backfilling Amazon's former space at West8 downtown, all per JLL and CoStar reporting for the first half of 2026. Providence's lease at the former Longacres campus in Renton is the year's largest new deal per CoStar.
Supply is no longer a factor. Newmark and JLL both report zero square feet under construction in their tracked markets as of Q2 2026; CoStar counts about 1.2 million square feet regionwide, most of it Amazon's Bellevue 600 tower, against a 2022 peak above 11 million. Sublease space has fallen to 11.7% of available inventory, the lowest share since 2018 per Kidder Mathews, while demolitions and residential conversions have started to remove older buildings on the Eastside and in Seattle.
Pricing and capital
Face rents are flat. Kidder Mathews has the regional average at $32.76 per square foot in Q2 2026, down 1% year over year, with Bellevue CBD near $54. Newmark puts Bellevue CBD Class A at $69.00. CoStar records 1.7% annual asking rent growth regionwide as of August 2026, but notes improvement allowances above $100 per square foot on first-generation space and a month of free rent per lease year, so effective rents remain well below asking.
Investment sales remain thin. CoStar reports $1.1 billion in trailing twelve-month volume through Q2 2026 against a five-year average of $2.5 billion, an average cap rate of 7.1% and an average price of $324 per square foot, with the Eastside taking nearly two-thirds of regional volume last year. Owner-users made up about a fifth of buyers, and a growing share of trades are land plays for demolition or conversion.
What this means for owners
For a family holding office, the question is no longer whether the floor has been reached but which side of the quality line the building sits on. Newer Bellevue product is leasing and can hold face rent; older commodity space in Downtown Seattle and along I-90 competes on concessions or on land value. We expect the next two years to reward owners who decide early between reinvesting to compete for the current tenant pool, holding for income with a realistic concession budget, or pricing the asset for a conversion or owner-user buyer. Waiting for the 2019 market to return is the one option the data does not support.
Sources: CoStar - Seattle Office Market + Capital Markets Reports; Seattle CBD, Bellevue CBD, Suburban Bellevue Submarket Reports - Aug 21, 2026; Newmark - Seattle Office Market Report - Q2 2026; Kidder Mathews - Seattle Office Market Report - Q2 2026; Cushman & Wakefield - Seattle-Bellevue Office MarketBeats (Downtown, Suburban, Eastside) - Q2 2026; Colliers - Puget Sound Office Market Report - Q2 2026; JLL - Seattle-Bellevue Office Overview and Market Notes - Q2 2026; Broderick Group - Eastside Office Market Insight - Q2 2026. Figures are as published by each source on the dates shown; definitions and building sets differ between publishers. General information only, not advice for a specific matter.
