The Seattle Commercial Real Estate Market

Apr 29, 2024

Seattle, Washington's commercial real estate market represents a fast-growing, thriving area ripe for property and tenant investment.

The Pacific Northwest metro is one of the fastest-growing cities in the country, and dozens of leading businesses call Seattle home. Crexi provides a window into Seattle's bustling commercial real estate market and equips property seekers with the tools they need to search, analyze, and exchange commercial assets.

Brokers in Seattle and those representing Seattle properties utilize Crexi's powerful marketing platform and tools to boost their listings' exposure and close more deals. Crexi has helped brokers close over $615 billion in commercial contracts and market more than $7 trillion in assets.

Crexi proudly supports Seattle, Tacoma, Renton, Bellevue, Kirkland, and the surrounding communities as the region's fastest-growing online CRE platform.

The State of Seattle Commercial Real Estate

Seattle is the largest city in Washington State, cradled between the saltwater Puget Sound to the west and the freshwater Lake Washington to the east, offering breathtaking landscapes that blend seamlessly with its urban skyline.

The metropolitan area is a hub of innovation and culture and a magnet for individuals and businesses alike, drawn by its thriving economy, robust job market, and hard-to-match quality of life. The city's iconic Space Needle, a legacy of the 1962 World's Fair, punctuates a skyline that is continually reshaped by ambitious real estate developments.

At the heart of Seattle's economic engine are industry giants such as Amazon and Microsoft, underscoring the city's reputation as a global technology and e-commerce powerhouse. This influx of tech talent has spurred economic and population growth, transforming the city into a cosmopolitan center where diversity and innovation thrive.

The commercial real estate market in Seattle has vigorously responded to this growth. The city's commitment to green building practices and its pioneering spirit can be found in developments across all submarkets, making it an attractive ground for investors looking to tap into a future-focused market.

Seattle Regional Breakdown

Over recent years, the Seattle metropolitan area has experienced a notable influx of new residents. This upward trajectory is largely fueled by the region's robust tech industry and a broad spectrum of professional opportunities, attracting a skilled workforce. While rapid expansion poses challenges, including pressures on infrastructure and housing, it also propels efforts toward sustainable urban development.

The population of the city of Seattle is nearly 750,000, adding more than 140,000 residents since 2010.
King County (where Seattle is the county seat) boasts a population growth rate of over 17% since 2010, and is home to over 2.2 million.
Counties in the Seattle MSA are King, Pierce, and Snohomish.
Largest cities include Seattle, Tacoma, Bellevue, Kent, and Everett.
Median age is 37.7, a little less than the figure in the US, according to data from CensusReporter.org.
Per capita income is $60,346, and median household income is $106,909, both figures about 40% higher than those in the US.

Seattle Job Market

Seattle's economy is a powerhouse of innovation and enterprise, anchored by technological, aerospace, and e-commerce stalwarts. Giants like Amazon, Microsoft, and Boeing, and a burgeoning startup ecosystem drive significant job growth across sectors, attracting a skilled workforce worldwide.

Seattle has also seen a rise in the life sciences sector and green energy initiatives, further diversifying its economic base. The city also benefits from proactive government policies to foster an environment conducive to business expansion and innovation. Initiatives such as tax incentives for clean technology companies and support for small businesses illustrate a strategic approach to stimulating economic and job growth.

The Gross Domestic Product (GDP) for the Seattle-Tacoma-Bellevue MSA is nearly $518 billion, growing by 41% over the past ten years, according to the most recent data from the St. Louis Federal Reserve.
The unemployment rate in the Seattle metropolitan area is 4.7% as of February 2024.
The region's job market is projected to grow by over 1.8% in 2024, while the state's unemployment rate is expected to increase slightly.
Key industry sectors in Seattle include aerospace, agriculture, construction and real estate, end-line manufacturing, information technology, and transportation and maritime.
Globally recognized companies in Seattle include Amazon, Boeing Commercial Airplanes, Microsoft Corporation, Starbucks, Costco, Weyerhaeuser, Nordstrom, REI, and Alaska Airlines.
WalletHub ranks Seattle as the 2nd best city for STEM jobs and the 7th best place to find a job, based on criteria such as job opportunities, employment growth, and average monthly earnings.
Seattle Mayor Bruce Harrell has proposed legislation to facilitate the conversion of commercial buildings into residential use, a move designed to address housing demands and revitalize urban spaces.
Innovative commercial real estate projects are supporting economic development in the Greater Seattle area, particularly in the Central Business District.
The University of Washington, Seattle University, and Seattle Pacific University offer a wide range of undergraduate, graduate, and professional programs to a diverse student body.
Nearly 47% of residents hold a bachelor's degree or an advanced degree, a figure about 1.3 times the rate in the US.
Seattle's transportation infrastructure includes major interstates I-5 and I-90, the Port of Seattle, and the Seattle-Tacoma International Airport (SEA), facilitating both local and international connectivity.

Seattle Industrial Market

The industrial market in Seattle is facing some challenges, with an uptick in vacancy rates and a period of negative net absorption, signaling a cooling in demand. However, there's a renewed sense of optimism amongst investors, driven by a more stable market environment and confidence in interest rate levels, suggesting the potential for increased transaction momentum as the year progresses.

Additionally, external factors such as the impact of the Baltimore Key Bridge collapse could help reposition Seattle and Tacoma ports as strategic alternatives in national supply chains as businesses adjust their logistics and distribution strategies.

Market overview (Colliers Q1 2024 Puget Sound Industrial Report)

Inventory: 338,337,664 SF
Vacancy rate: 6.7%
Net absorption: -393,000 SF (Q1 2024)
Deliveries: 167,000 SF
Under construction: 7,000,000
Key leases by tenant: Wesco Distribution, WGW Sales, Pepsi/Frito Lay
Largest submarkets: Kent Valley, Pierce County, Seattle Close-In, Northend

Crexi Insights

These are the most recent industrial lease and sales trends from Crexi Insights (as of April 2024):

For Lease (active)

Asking rate/SqFt (median): $14 per year
Median SqFt/listing: 8,106
Days on market: 229
Total listings on Crexi: 76 spaces

For Sale (active)

Median asking price: $3.5 million
Price/SqFt: $194
Asking cap rate: 5.8%
Days on market: 376
Total listings on Crexi: 16

Sales Comps (past 12 months)

Median sold price: $2.62 million
Sold price/SqFt: $353
Total sales volume: $75 million
Sold cap rate: 3.3%
Median SqFt sold/transaction: 5,960
Total SqFt sold: 210,000
Days on market (median): 163

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Seattle Office Market

The Seattle office market has experienced a surge in leasing activity that has not been seen since the end of 2022, highlighting a robust demand for office spaces across the Puget Sound region. Bellevue's Central Business District (CBD) is a hub for major lease transactions, capturing a significant portion of the market's interest, while the Seattle CBD maintains its momentum with several deals.

Market overview (Savills Seattle/Puget Sound Q1 2024 Office Report)

Inventory: 123,900,000 SF
Vacancy rate: 26.9%
Leasing activity: 1,500,000 SF (Q1 2024)
Key leases by tenant: The Pokemon Company, ByteDance, CENTRL Office, PATH, UIPath, ZGF Architects
Submarkets with lowest vacancy: Pierce County Suburban, Eastside, Bellevue CBD, Everett CBD
Submarkets with highest rent: Bellevue CBD, Seattle CBD, Fremont/North Seattle, Pioneer Square/SoDo

Crexi Insights

For the most recent insights into the Seattle office market, Crexi Insights is your go-to resource. Here are the most recent office leasing trends, sale listings, and comparable data as of April 2024.

For Lease (active)

Asking rate/SqFt (median): $28 per year
Median SqFt/listing: 2,994 SF
Days on market: 369
Total listings on Crexi: 716 spaces

For Sale (active)

Median asking price: $1.77 million
Price/SqFt: $319
Asking cap rate: 5.9%
Days on market: 175
Total listings on Crexi: 25

Sales Comps (past 12 months)

Median sold price: $1.71 million
Sold price/SqFt: $433
Total sales volume: $104 million
Sold cap rate: 4.7%
Median SqFt sold/transaction: 4,760 SF
Days on market (median): 255

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Seattle Retail Market

The Seattle metropolitan retail market remains stable while grappling with challenges such as urban store closures and a softening in neighborhood and strip center performance. Despite these hurdles, the market is resilient, with vacancy rates hovering near historic lows and a slight year-over-year increase in asking rents. Demand drivers, including ongoing population growth and consumer confidence, are positive, while constricted supply due to redevelopment pressures limits new deliveries.

Market overview (Cushman & Wakefield U.S. Shopping Center Reports Q1 2024)

Inventory: 65,646,844 SF
Vacancy rate: 4.4%
Net absorption: -351,864 SF (Q1 2024)
Deliveries: 0 SF
Under construction: 0 SF
Retail submarkets by county: King, Kitsap, Pierce, Snohomish, Thurston

Crexi Insights

Retail lease and sales trends from Crexi Insights (as of April 2024):

For Lease (active)

Asking rate/SqFt (median): $30 per year
Median SqFt/listing: 1,975 SF
Days on market: 344
Total listings on Crexi: 323 spaces

For Sale (active)

Median asking price: $1.5 million
Price/SqFt: $313
Asking cap rate: 5.9%
Days on market: 173
Total listings on Crexi: 23

Sales Comps (past 12 months)

Median sold price: $2.16 million
Sold price/SqFt: $498
Total sales volume: $76.6 million
Sold cap rate: 4.7%
Median SqFt sold/transaction: 3,222 SF
Days on market (median): 308

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Seattle Multifamily Market

The Seattle-Tacoma multifamily market is experiencing a shift towards improved affordability and increased attractiveness for renting, particularly among younger professionals. This trend is fueled by a significant uptick in new households, the highest in a decade, spurred by lower rents relative to previous years and sustained wage growth.

With a substantial number of new units on the horizon, especially in downtown Seattle and evolving areas like Capitol Hill-Central District and northern Tacoma, the market is adapting through strategic use of concessions to attract tenants to these expanding inventories. This dynamic is reshaping the landscape of the multifamily market, making it an increasingly appealing option for budget-conscious renters and signaling a vibrant period of demand and growth in Seattle's core and surrounding areas.

Market overview (Kidder Mathews Q1 2024 Seattle Multifamily Market Report)

Total housing units: 1,709,710
Multi-unit inventory: 615,496 units
Vacancy rate: 6.8%
Average asking rent: $1,917
Absorption: 3,468 (Q1 2024) vs 3,335 (2023 Total)
Units delivered: 3,621 (Q1 2024) vs 2,411 (2023 Total)
Under construction: 30,602 units
Submarkets with most construction: Denny Triangle, Shoreline, Totem Lake, First Hill
Key sale transactions by property: Atrium on James, Koi Apartments, The Duo

Crexi Insights

Here are the most recent multifamily Insights from Crexi (as of April 2024):

For Sale (active)

Median asking price: $3.54 million
Price/SqFt: $438
Price/Unit: $337,000
Asking cap rate: 5.1%
Days on market: 77
Total listings on Crexi: 41

Sales Comps (past 12 months)

Median sold price: $1.37 million
Sold price/SqFt: $410
Sold price/unit: $742,000
Total sales volume: $453 million
Sold cap rate: 5.4%
Total SqFt sold: 1.7 million
Days on market (median): 167

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Get more in-depth Seattle market data with Crexi Intelligence.