Economy: Job Count And Unemployment Both Rise
The Seattle metro area added 14,600 jobs year-over-year (YOY), with the latest total figure at over 2.1 million. The unemployment rate, however, also rose, up 40 basis points (bps) YOY to 5.0%, above the U.S. rate of 4.2%. As measured by the Consumer Price Index for All Urban Consumers, Seattle metro area prices advanced 4.4% YOY, driven by higher energy (+15.9%) and food (+5.3%) costs. Minus food and energy, the index rose 3.3% YOY, mainly due to cost increases to recreation (+7.0%) and shelter (+2.6%).
Supply And Demand: Vacancy Up, Absorption Recovers Yoy
The Eastside office market reported an overall vacancy rate of 22.4% in the third quarter of 2026, up 30 bps from a year ago. Direct vacancy climbed 1.2% YOY to 7.8 million square feet (msf), while sublease vacancy surged 13.6% YOY to nearly 1.3 msf, primarily due to Meta and Bungie bringing additional sublease space to market. Overall vacancy in the Bellevue CBD submarket increased 200 bps YOY to 25.5%.
Overall absorption reached negative 369,000 sf in the third quarter, a major improvement from the negative 1.2 msf reported one year ago. The year-to-date (YTD) total increased YOY from negative 1.8 msf to negative 161,000 sf. Absorption should continue rising to close out the year as more tenants move into their recently leased spaces.
Pricing: Rents Remain Highest In The Metro Area
The Eastside office market reported average annual gross rental rates of $49.26 per square foot (psf) in the third quarter, up 1.6% YOY. Class A rents in the Bellevue CBD submarket reached $66.18 psf (+3.3% YOY), while Class A rents in the non-CBD submarkets averaged $44.26 psf (+3.3% YOY). With the addition of notable subleases, which have lower rents, Eastside rents should continue to level out by the end of the year, while remaining the highest in the Puget Sound.
Construction: One Project Under Construction
The Eastside has only one major project under construction – the 800,000-sf ONNI Bellevue, set for a Q4 2030 delivery. Nearly 2.7 msf of new inventory has entered the market since 2024, though only 479,000 sf has delivered in the past year. Nearly 8.0 msf of proposed space is in the pipeline, with 7.1 msf (88.8%) located in the Bellevue CBD submarket. The 740,000-sf Kanon Towers is the project most likely to break ground next, with delivery slated for 2028.
Leasing Activity: Ytd New Leases Nearing 2 Msf
Just over 358,000 sf of new deals were signed on the Eastside in the third quarter, down 27.4% from this point last year. The Bellevue CBD, 405 Corridor, and Bothell/Woodinville submarkets reported the most activity, combining for 243,000 sf. Approximately 8.3% of all new deals signed during the quarter were at or above 10,000 sf, nearly matching the 8.1% signed at this time a year ago. YTD leasing totals reached nearly 2.0 msf. As demand for high-quality space continues to grow on the Eastside, more five-figure deals are expected to be signed to close out the year.
Just 19,000 sf of space was renewed in the third quarter, down 83.8% from a year ago. Renewals totaled nearly 380,000 sf for the year.
Sales: Eastside Sales Highest In Metro
Office sales on the Eastside reached $342.7 million (M) through the third quarter of 2026, down 55.3% from the $766.3M in sales reported one year ago. In the most noteworthy transaction of the quarter, Harrison Street Asset Management sold Evergreen Plaza, in the Kirkland submarket, to EvergreenHealth for $69.9M ($700.82 psf). The new owner occupied the nearly 100,000-sf medical office building at the time of the sale.
The Seattle MSA reported $443.0M in office sales through three quarters of 2026, down 56.8% from the $1.0 billion that traded at this point a year ago.
