The Puget Sound office sector is showing tangible signs of stabilization through the first half of 2026, with leasing fundamentals improving notably from last year. A recent market report from Cushman & Wakefield indicates that leasing activity reached 3.4 million square feet year-to-date in the second quarter, up from 2.1 million square feet during the same period in 2025. This 62% increase in velocity underscores a meaningful uptick in tenant engagement across the region.
While the leasing rebound has been pronounced, availability remains elevated. Cushman & Wakefield reports that overall vacancy for the Puget Sound office market edged higher from 27.6% to 28.6% over the period. The modest increase suggests that, despite stronger leasing, the market is still working through a sizable volume of existing and returning supply.
Absorption trends, however, point to a market that is gradually firming. According to the report, net absorption year-to-date improved sharply from negative 2.41 million square feet in 2025 to negative 386,368 square feet in 2026. Although the market has not yet returned to positive absorption, the magnitude of the improvement indicates that the balance between move-ins and move-outs is moving closer to equilibrium.
Cushman & Wakefield describes the first half of 2026 as a turning point for Puget Sound offices. Brian Cagayat, Research Manager for the Pacific Northwest at the firm, noted that the combination of a 62% year-over-year increase in leasing activity and the significant absorption improvement reflects growing occupier confidence. In his view, tenants are increasingly prepared to make long-term real estate commitments after several years of uncertainty.
Large occupier commitments have helped validate the improving sentiment. Among the notable transactions highlighted in the report is OpenAI’s lease for 247,487 square feet at City Center Plaza in Bellevue. The lease, described in connection with OpenAI’s expansion in downtown Bellevue, represents one of the more substantial office commitments in the region and reinforces the role of major technology and innovation users in driving demand.
Taken together, the uptick in leasing volume, the narrowing absorption deficit and selective large-block transactions suggest that the Puget Sound office market is entering a period of gradual healing. Elevated vacancy will likely remain a feature of the landscape in the near term, but the current data supports the view that tenant demand is re-engaging, setting a firmer foundation for future rebalancing of supply and demand.
