Seattle office demand is lowest among 7 major U.S. cities
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Seattle recently saw the greatest decline in demand for office space among seven large American cities, according to a commercial real estate software company.
Why it matters: Empty offices take a toll on downtown areas like Seattle's, which have historically relied on worker foot traffic to remain vibrant and to support retail businesses and restaurants.
By the numbers: Despite increased interest in medium-size office spaces between 10,000 and 50,000 square feet, there was zero new demand for spaces 50,000 square feet or larger between June and September in Seattle, VTS' Office Demand Index (VODI).
- Demand for office space in Seattle, Los Angeles, San Francisco, Boston, Washington, D.C., New York and Chicago was just half of pre-pandemic demand at the end of the third quarter, per the VTS report.
- Coming in at only about one-fifth of its pre-pandemic pace in 2018–2019, Seattle's index was the lowest among all the cities examined.
- Seattle experienced a 43% drop quarter over quarter and 52% drop year over year, GeekWire reported.
State of play: With a cooling job market, steady work-from-home numbers and a demand for office space that's hovered for two years between 46% and 67% of pre-pandemic levels, this is "likely the new normal," Max Saia, VTS' vice president of investor research, said in a summary of the report.
Yes, but: The latest numbers reflect foot traffic recovery numbers seen in recent Downtown Seattle Association reports, but the Emerald City has one card up its sleeve not found in many other U.S. cities, DSA spokesperson James Sido told Axios: a growing downtown resident population.
- Additionally, city leaders have announced a downtown activation plan that includes the conversion of offices to housing, updated land use policies, art walks, competitions and movie nights.
- The city's Seattle Restored program is working to get a mix of diverse and eclectic businesses that might not have previously been able to afford downtown rent into the empty storefronts, per Sido.
What we're watching: The delicate dance between employers who want workers to return to the office and workers who'd rather work from home is still evolving, Sido said.
- "There's no question we have more empty space than we'd like, but saying this is how it will be from now on is premature."