In downtown Seattle, total office vacancy is now around 35%, according to commercial real estate firm CBRE, and rents are softening. That’s even worse than during the Great Recession, when downtown Seattle office vacancy reached around 21%.
There’s been a lot of construction around the country, I wonder how other cities are faring. They’re even talking about changing some of these buildings to residential through urban planning. Is this the start of the bubble popping?
Seattle’s situation may change once Amazon starts enforcing their full-time return-to-office policy in 2025. I expect other companies will follow suit. Though in the mean time there is more room for the office market to fall; another Seattle Times article from August mentioned:
Seattle’s downtown is now second only to San Francisco’s for risk of office loan foreclosures, according to a recent analysis by Kaplan Group, a debt collection firm, which warns that high-risk cities “could see a wave of loan defaults or even localized fire sales.”
I would love to see some of that empty office space convert to other uses. Every city’s office/retail core feels soulless if nobody lives there, or even has a reason to go there after 5pm.
