Seattle Office Market Report - Q1 2026

The Puget Sound office market's regional vacancy rate rose to 23.1% in first quarter 2026, a 30 basis point increase from the prior quarter, with net absorption totaling negative 486,708 square feet as leasing activity remained slow despite signs of stabilization and improved fundamentals. Large technology firms including Microsoft and Amazon have paused office expansions and reduced surplus space, while Seattle's position as the third-ranked U.S. metro area for artificial intelligence industry growth is generating demand for smaller, furnished "plug and play" spaces, though downtown Seattle continues facing elevated vacancy and weak tenant commitment.