Seattle Commercial Office Space for Rent

Q3 2026

Q3 2026 Seattle Commercial Real Estate Market Report

Focus: Q3 2026 Market Trends

Executive Summary

Puget Sound office absorbed 514,000 SF in Q3 2026, the strongest quarter since Q3 2021, and downtown Seattle posted its first positive quarter in five years at 300,000 SF. AI companies are a growing source of demand, accounting for 21.6% of regional office leasing in the first half. On TenantBase, office demand nearly quadrupled to 44.8% of Seattle tenant searches, up from 11.7% in Q2, while retail remained the largest category at 49.5%.

Sector Snapshot

  • Office: Recovering. Vacancy fell 40 basis points to 27.9%, the fourth straight quarter of positive absorption.
  • Industrial: Softer. Vacancy rose to 12.0%, while leasing grew 11.7% from Q2.
  • Retail: Leading demand. Retail was 49.5% of TenantBase searches, with 39.1% of retail tenants seeking 5+ year terms.
  • Multifamily: Stable. Average rent was $2,226, with occupancy at 94.8%.

Seattle Tenant Demand Index

The TenantBase Tenant Demand Index tracks what businesses across the Seattle region are actively searching for on the TenantBase platform each quarter. Because it measures tenant intent before leases are signed, it shows where demand is heading ahead of traditional vacancy and absorption data.

Q3 2026 Search Share by Space Type (July 1 to September 30, 2026)

  • Retail/Storefront: 49.5%
  • Office: 44.8%
  • Warehouse/Industrial: 5.7%

Three-Quarter Trend

  • Retail/Storefront: 61.9% in Q1, 58.0% in Q2, 49.5% in Q3
  • Office: 11.2% in Q1, 11.7% in Q2, 44.8% in Q3
  • Warehouse/Industrial: 27.3% in Q1, 31.2% in Q2, 5.7% in Q3

Key Takeaways

  • Office demand nearly quadrupled, from 11.7% of searches in Q2 to 44.8% in Q3.
  • Office tenants want flexibility. 42.6% of office searches sought terms under one year.
  • Retail tenants are committing long. 65.2% of retail searches sought terms of 3 years or longer, led by 5+ year terms at 39.1%.
  • The Eastside and North Seattle/Northgate drew the most location interest, followed by Kent/Auburn and South Seattle.

Office Market

Key Metrics (Q3 2026, CBRE, Puget Sound)

  • Vacancy: 27.9%, down 40 basis points quarter over quarter
  • Net absorption: 514,000 SF in Q3, the strongest since Q3 2021, and 979,000 SF year to date
  • Asking rent: $47.18/SF full service, with Class A at $51.02/SF
  • Construction: no space under construction
  • Submarkets: Lake Union at 21.7%, Bellevue CBD at 26.0% and $70.66/SF, Pioneer Square at 35.6%, and the Seattle CBD at 37.6% with 197,000 SF of Q3 absorption
  • AI demand: AI companies accounted for 21.6% of regional office leasing in the first half of 2026 (JLL via GeekWire)

TenantBase Office Activity

Demand share: 44.8% of Seattle tenant searches, up from 11.7% in Q2 and 11.2% in Q1.

Lease terms:

  • Less than 1 year: 42.6%
  • 2 to 3 years: 27.7%
  • 3 to 5 years: 23.4%
  • 5+ years: 6.4%

Space requirements by term:

  • Less than 1 year: 1,000 to 2,056 SF
  • 2 to 3 years: 857 to 2,071 SF
  • 3 to 5 years: 1,571 to 3,357 SF
  • 5+ years: 1,167 to 2,833 SF

TenantBase data vs. the market: Seattle office tenants on TenantBase are seeking small suites, mostly under 3,500 SF. With downtown vacancy above 35% and no new construction, small tenants have strong leverage on rent and concessions, while Lake Union is tighter.

Industrial & Warehouse Market

Key Metrics (Q3 2026, CBRE, Puget Sound)

  • Vacancy: 12.0%, up 20 basis points quarter over quarter
  • Net absorption: negative 665,000 SF
  • Leasing: 4.9 million SF, up 11.7% quarter over quarter
  • Asking rent: $1.15/SF per month NNN, flat
  • Construction: 1.5 million SF underway, about 70% preleased
  • Submarkets: Eastside at 8.7%, Seattle Close-In at 9.7%, Kent Valley at 10.7% and $1.06/SF, and Tacoma at 16.8%
  • Major lease: Shield AI, 406,000 SF in SeaTac

TenantBase Warehouse Activity

Demand share: 5.7% of Seattle tenant searches, down from 31.2% in Q2 and 27.3% in Q1.

TenantBase data vs. the market: Warehouse searches on TenantBase leaned toward 3+ year terms, with 3 to 5 year searches averaging 6,250 to 17,500 SF. With vacancy at 12.0% and rents flat, industrial tenants have room to negotiate, especially in Kent Valley and Tacoma.

Retail Market

TenantBase Retail Activity

Demand share: 49.5% of Seattle tenant searches, compared with 58.0% in Q2 and 61.9% in Q1.

Lease terms:

  • 5+ years: 39.1%
  • 3 to 5 years: 26.1%
  • Less than 1 year: 19.6%
  • 2 to 3 years: 15.2%

Space requirements by term:

  • Less than 1 year: 1,000 to 2,500 SF
  • 2 to 3 years: 500 to 1,000 SF
  • 5+ years: 2,214 to 4,786 SF

TenantBase data vs. the market: Seattle retail tenants on TenantBase are making long commitments, with 5+ year searches averaging 2,214 to 4,786 SF. Retail demand is spread across neighborhood centers, with the Eastside and North Seattle drawing the most interest.

Multifamily Market

Seattle average asking rent was $2,226 in Yardi Matrix's July 2026 report, with occupancy at 94.8%, down 60 basis points year over year. About 1,932 units were delivered from January through May.

Q4 2026 Outlook

  • Office: Expect AI and tech leasing to keep supporting absorption, with downtown vacancy easing slowly.
  • Industrial: Expect vacancy to stabilize as the construction pipeline stays small.
  • Retail: Expect long-term neighborhood retail demand to continue.
  • Multifamily: Expect stable occupancy as deliveries slow.

Frequently Asked Questions

What type of commercial space are Seattle tenants searching for in 2026?

In Q3 2026, 49.5% of Seattle tenant searches on TenantBase were for retail space, 44.8% for office space, and 5.7% for warehouse space.

What is the office vacancy rate in Seattle?

Puget Sound office vacancy was 27.9% in Q3 2026, with downtown Seattle at 35.4%, according to CBRE.

What is the industrial vacancy rate in Seattle?

Puget Sound industrial vacancy was 12.0% in Q3 2026, with Kent Valley at 10.7%, according to CBRE.

How can I find commercial space in Seattle at no cost?

TenantBase matches business tenants with vetted independent tenant rep brokers across the Seattle region at no cost to the tenant. Brokers are compensated by the landlord. Get started with TenantBase.

Sources

  1. TenantBase proprietary search data, Seattle, July 1 to September 30, 2026
  2. TenantBase, Seattle Commercial Real Estate Market Report, Q2 2026
  3. TenantBase, Seattle Commercial Real Estate Market Report, Q1 2026
  4. CBRE, Puget Sound Office Figures, Q3 2026
  5. CBRE, Puget Sound Industrial Figures, Q3 2026
  6. GeekWire, Seattle Office Market and AI Companies, July 2026
  7. Yardi Matrix via Multi-Housing News, Seattle Multifamily Report, July 2026

Disclaimer

Information in this report is aggregated from third-party sources and TenantBase proprietary platform data, and was synthesized with the assistance of AI. Market metrics reflect the most recent published data available at the time of writing. TenantBase search data reflects tenant activity on the TenantBase platform and is not a measure of total market leasing. All figures should be independently verified before making real estate decisions.