1. Negative absorption will land between 500k and 1M RSF.
“Survive til ‘25” may turn into “We’ll get our fix in 2026”. While I project 2025 will be better than 2024, and certainly better than 2023, I project another year of negative absorption, but half as much as we experienced last year.
2. The 10-year treasury will end 2025 below 4%.
Our market will likely struggle to achieve significant recovery until interest rates drop below 4%. Reduced interest rates would facilitate easier access to debt, encourage increased liquidation, and provide businesses with the necessary funds for growth. These factors are crucial positive drivers for a robust recovery of the Seattle office market.
3. Three of the largest five leases signed in Seattle in 2025 will be professional service (not tech).
While Amazon’s return to office is a positive sign for overall office use in Seattle, notably within the tech sector, I project another year of slow demand from the technology sector around office space in Seattle (not Bellevue).
4. Bellevue will outpace Tech leases signed by 3x (tenants over 20,000 feet).
I project another positive year for Bellevue concerning tech demand, particularly from companies entering the market from outside the region. As Amazon returns to the Seattle area, this is expected to foster a more vibrant environment. However, it may take an additional year for companies to fully experience this positivity and gain the confidence needed to make strategic plans based on these developments.
5. Historical Class B product will have the greatest increase in leasing velocity (by percentage) than any office asset in Seattle.
Most of the Class B historic properties have reset their basis, with new owners offering base rental rates lower than anything I have encountered in my 15-year career. The fourth quarter of 2024 showed signs that this submarket is experiencing demand levels not seen since 2019. Based on this trend, I project that the Class B market will continue to see success throughout 2025, driven by attractive rental rates and a recovering demand for office space.
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