Report: Office Vacancy Rises Only Slightly

SEATTLE-In a sign the office market here may be stabilizing, vacancy in the Puget Sound rose just one-tenth of a percentage point during the second quarter to 16.84% (13.5 million sf), according to the latest report from CB Richard Ellis.

The slight increase from 16.74% at the end of the first quarter is the result of “very little tenant movement into or out of the region,” according to the report, which found only 27,368 sf were absorbed during the second quarter on a base of 80.4 million sf. Average full service asking rates for class A space fell from $24.13 to $23.71.

The 35.4-milion-sf Downtown Seattle market also saw vacancy rise only slightly, from 16.14% in the first quarter to 16.24% at the end of the second quarter on 34,114 of positive net absorption. The recent completion of several new office buildings in the Lake Union submarket, which posted a vacancy rate of 24.5% (590,000 sf), has contributed to the rise in Downtown vacancy, according to the report. As a result, the Downtown average asking full-service lease rate decreased in the second quarter from an average of $27.15 per sf per year to an average of $26.47 per sf per year.