Office landlords in downtown Seattle have had to accept a significant discrepancy between the base lease rates they negotiate with tenants and the adjusted rents they actually agree to after accounting for concessions. As a result, it is often taking longer than in the past for their investments to reach break-even point.

While negotiated base rents of at least 10,000 SF have been stable since 2019 at around $40 to $45 a year in triple-net (NNN) terms, they fell about $5 per SF between Q1 and Q3 2023 compared to the average for 2022, according to a break-even analysis by CBRE's Puget Sound office. Triple-net leases are agreements by which the tenant commits to paying all costs associated with the property including real estate taxes, insurance and maintenance in exchange for lower rent. The adjusted rents CBRE computed also factored in free months of rent, tenant improvement allowances and operating expenses.

CBRE's analysis of the Seattle market included leases for at least 10,000 SF from 2019 to Q3 2023. However, no deals over 10,000 SF were signed since 2019 for buildings constructed in 2018, 2019 and 2022. Subleases were excluded from the study.