According to the Puget Sound Business Journal, commercial real estate in the Seattle area is bucking national trends – and that could be good news for downtown Seattle and neighboring communities.
In January, the Seattle area was one of the nation’s strongest commercial real estate markets. In fact, Seattle and Denver tied for 4th place among the 12 largest U.S. markets. The inventory of space available for subleasing has dropped, and new leasing activity has risen sharply. The Seattle-area market is now at 91% of pre-pandemic leasing levels.
At the same time, the cost of commercial leases has dropped in the Seattle area. In December, the average office space listing rate was $35.67 per square foot, a 2.5% drop from the same time in 2020. Seattle trailed only Manhattan, which saw a 7.2% drop in commercial rents. In the same time period, the square footage costs were $38.44 in the top 50 U.S. markets, an uptick of 1.8%.
Do high demand – and dropping costs – for commercial leases foreshadow economic recovery in downtown Seattle and neighboring cities?