Tacoma Commercial Office Space for Rent

Q4 2025

Tacoma Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Tacoma commercial real estate (CRE) market in late 2025 is defined by a mix of steady growth and sectoral adjustments. The Multifamily market remains a strong performer, driven by relative affordability compared to Seattle and steady demand, though new supply is moderating rent growth [3, 4]. Industrial fundamentals are stabilizing after a period of rapid expansion, with vacancy rates inching up as new inventory delivers [2]. Retail is resilient, supported by consumer spending and a lack of new construction, which has kept vacancy low [4]. Office activity is finding equilibrium, with leasing strength concentrated in suburban nodes like Tacoma and Federal Way, though overall vacancy remains elevated compared to historical norms [1].

TenantBase Proprietary Data [5] highlights the distribution of active tenant demand over the last 90 days:

  • Retail/Storefront dominated market activity with 58.21% of all searches [5].
  • Warehouse was the second most active sector at 41.79% [5].
  • Office accounted for a minimal 1.49% of total search volume [5].

Office Market

Market Overview Tacoma's office market is stabilizing, with vacancy rates showing slight improvement and rents holding steady. The market benefits from its position as a cost-effective alternative to Seattle.

  • Vacancy & Availability: The South Puget Sound office vacancy rate improved slightly to 7.89% in Q3 2025, reflecting growing tenant confidence [1]. Availability decreased for the first time in nearly four years, signaling a potential turning point [1].
  • Rental Rates: Average asking rents remained steady at $30.00 per SF Full Service, with concessions stabilizing as positive absorption takes hold [1].
  • Market Drivers: Leasing activity is strongest in suburban locations with good accessibility and parking. Tenants are increasingly seeking renovated, "amenitized" assets [1].
  • Tenant Preferences: TenantBase data reflects minimal activity in this sector, with only one recorded inquiry for a lease of Less than one year [5].

TenantBase Activity [5]

  • Demand Share: Office accounted for 1.49% of total search volume [5].
  • Lease Term Preference: The single recorded inquiry was for a short-term commitment, aligning with the broader trend of flexibility in the office sector [5].

Industrial & Warehouse Market

Market Overview The industrial sector remains a key economic driver for Tacoma, though it is navigating a period of supply-driven vacancy increases.

  • Vacancy & Rent: Industrial vacancy in the Puget Sound region rose to 9.9% in Q3 2025, up 20 basis points quarter-over-quarter [2]. Despite this, asking rents have remained resilient due to the region's logistics importance.
  • Construction: Construction activity has slowed significantly, declining from 14.1 million SF at year-end 2022 to 6.64 million SF in Q3 2025, which should help stabilize vacancy rates [2].
  • Leasing Highlights: TenantBase data indicates a strong preference for mid-term leases, with 25.00% of warehouse inquiries for 3-5 Year terms [5].

TenantBase Activity [5]

  • Demand Share: Warehouse accounted for 41.79% of total search volume [5].
  • Lease Term Preference: Demand is varied, with a preference for shorter commitments:
    • 1-2 Years: 33.33% of deals [5].
    • 2-3 Years: 25.00% of deals [5].
    • 3-5 Years: 25.00% of deals [5].
  • Size Requirements: The average lower size requirement for warehouse space is 2,500 SF for 1-2 year terms, increasing to 2,500 SF for 3-5 year terms [5].

Retail Market

Market Overview Tacoma's retail sector is performing well, with low vacancy and steady demand for space. The market benefits from a lack of new supply and consistent consumer spending.

  • Vacancy & Availability: Retail vacancy remains low, supported by a lack of new construction, with deliveries falling to 25-year lows [4].
  • Market Trends: The tight market has led to increased competition for quality space, strengthening investor confidence [4].
  • Tenant Interest: Retail dominated search activity in Q4, accounting for nearly 60% of all inquiries [5].

TenantBase Activity [5]

  • Demand Share: Retail/Storefront activity dominated with 58.21% of all search volume [5].
  • Lease Term Preference: Retail tenants show a balanced appetite for lease lengths:
    • 1-2 Years: 36.84% of deals [5].
    • 3-5 Years: 26.32% of deals [5].
    • 2-3 Years: 21.05% of deals [5].
  • Top Locations: Tenant interest is highest in Puyallup (12 deals) and Tacoma (11 deals), reflecting strong activity in these key submarkets [5].

Multifamily Market

Market Overview The multifamily market is robust, with steady demand and rent growth moderated by new supply.

  • Vacancy & Occupancy: Vacancy continues to tighten in North Tacoma despite elevated new supply, pointing to steady demand [3].
  • Rents: Average rents in Tacoma are generally between $1,700 and $1,900 per month, offering a significant discount compared to Seattle [3].
  • Construction: While new deliveries are pressuring some submarkets, a slowdown in construction starts is expected to support tighter fundamentals in 2026 [3].

2026 Outlook

Looking ahead to 2026, the Tacoma market is positioned for steady performance and continued investment appeal.

  • Multifamily Strength: With new construction slowing, the multifamily market is expected to see continued demand and potential rent growth, particularly in affordable segments [3].
  • Industrial Stabilization: As the current wave of industrial supply is absorbed, vacancy rates are projected to stabilize, supporting rent growth [2].
  • Retail Resilience: Limited new supply will keep retail vacancy low, maintaining a landlord-favorable environment [4].

Sources

  1. Kidder Mathews: 3Q 2025 South Puget Sound Office Insights
  2. CBRE: Puget Sound Industrial Figures Q3 2025
  3. The Joseph Group: Tacoma Rental Market Analysis 2025
  4. Marcus & Millichap: Seattle-Tacoma Retail Market Report
  5. TenantBase Proprietary Market Data (Tacoma - Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.