Direct vacancy, which does not include sublease space, stands at 13.4% (11.3 million sf) after ending the first quarter at 13.1% and ending the second quarter at 13.3%. Overall vacancy, which includes sublease space, ended the first quarter at 16.6%, fell to 16.5% by the end of the second quarter and now stands at 16.1% as the fourth quarter begins.

In the 35.6 million-sf metropolitan market, the third quarter saw the first drop in vacancy rates since the second quarter of 2000, when it dropped from 1.9% to an all-time low of 0.62%. Overall vacancy in the city now stands at 15.5%, down from 15.7% at the end of the second quarter. Direct vacancy stands at 11.4%, which is largely unchanged from the end of the second quarter.

"This falling vacancy shows the market is stabilizing," says Jesse Otttelle, an associate vice president in with Colliers' Seattle Office Properties Group. "The year-to-date absorption of 336,023 sf shows signs of improvement and will be the first positive year of absorption since year-end 2000."