Seattle Q3 2024 Office Market Review

The Seattle office market in Q3 2024 presents a mixed outlook, with vacancy rates on the rise alongside positive developments, such as Amazon’s new return-to-office policy. This shift may stimulate recovery by increasing foot traffic and demand in downtown areas.

Key Market Trends

Vacancy Rates and Leasing Activity

Seattle’s office market continues to face tenant retention challenges, yet Amazon’s upcoming five-day in-office policy (set for January 2025) is expected to drive renewed leasing activity and bolster downtown demand.

This effort brought a mixed response, with employees citing concerns over work-life balance, increased commuting times, and the potential impact on productivity. In response, over 500 employees have petitioned for a reversal of this mandate, arguing that the policy may lead to higher attrition rates and could hinder Amazon’s ability to attract and retain top talent. 

Despite this, Seattle remains a key hub for tech employment–as of 2024, approximately 287,621 individuals were employed in tech roles across the Seattle metropolitan area, representing about 13% of the city’s workforce. As companies expand to support innovation in AI, cloud computing, and software development, Seattle continues to attract both established firms and startups eager to access the city’s deep talent pool and collaborative ecosystem. This growth is creating a ripple effect, driving up leasing activity in prime office spaces as firms seek locations that align with employee expectations for quality amenities, flexible layouts, and proximity to urban conveniences. 

Rental Rates

Asking rental rates are beginning to show slight declines. In Downtown Seattle, Savills research sees Class A direct asking rents averaged $49.64 per square foot, down $0.70 from the previous quarter. Meanwhile, Eastside Class A rents fell to $53.66 per square foot, showing similar downward pressure across high-demand area.

This gradual decrease in rents can offer a competitive advantage for companies seeking premium spaces at more competitive prices. The downward pressure suggests that landlords are becoming more flexible in their pricing strategies to attract tenants in high-demand areas, especially as firms recalibrate space needs to balance in-office and remote work. This trend may continue, with high-quality spaces offering the most resilience in retaining value while standard spaces see further adjustments.

Opportunities and Trends

Despite high vacancies, the current market offers opportunities for businesses to secure prime locations at favorable rates. Well-capitalized landlords are leveraging concessions to attract tenants, providing an advantageous environment for companies looking to expand or relocate. Additionally, the trend of flight-to-quality is evident as tenants increasingly seek high-amenity Class A spaces to accommodate hybrid workforces.

Future Outlook

Looking ahead, Seattle’s office market may see gradual improvements as Amazon’s return-to-office policy takes effect, encouraging other companies to reassess their space needs. While vacancies remain elevated, the market is becoming more tenant-favorable, with competitive lease terms available. Success for businesses will likely depend on balancing flexibility with strategic office decisions that align with employee preferences and operational goals.