Puget Sound’s office and industrial sectors continued to demonstrate resilient fundamentals in the third quarter of 2026, according to CBRE’s latest market reporting. Both asset classes showed signs of stabilization, with office performance improving and industrial conditions normalizing after an extended period of elevated development.
On the office side, Seattle recorded its strongest occupancy gains in several years. For the fourth straight quarter, office occupancy growth outpaced space givebacks, underscoring steady user demand. Within the urban core, Downtown Seattle posted its first quarter of positive net absorption since Q3 2021, marking a meaningful shift after several years of contractionary trends in that submarket.
Year-to-date net absorption across the broader office market reached 979,000 sf. Leasing activity remained heavily concentrated in higher-quality product, with Class A space accounting for 80% of all deals so far this year, the highest share recorded since at least 2021. After softening in Q2 2026, the overall direct asking rate moved higher, rising to $47.18 per sf per month on a full-service gross basis. That increase extends the upward rent trajectory that has been in place since the market bottomed in Q3 2021.
Industrial indicators reflect a market transitioning from rapid expansion to a more balanced footing. The region’s industrial development pipeline declined 74% year-over-year, falling to its lowest level in five years. Approximately 70% of the remaining projects under construction are already preleased, with aerospace and defense users driving the largest transactions of the quarter.
Despite that preleasing strength, industrial net absorption was down 665,00 sf in the quarter. Even so, overall industrial leasing volume rose 11.7% quarter-over-quarter to 4.9 million sf, signaling ongoing tenant demand. Market availability ticked lower, compressing by 10 basis points to 13.4%.
New industrial supply was limited, with just 101,000 sf delivered during the quarter, described as the lowest level of new inventory in several years. At the same time, 1.5 million sf of industrial space remained under construction across the region. Asking rents in the industrial sector were stable, with the overall direct average rate holding at $1.15 per sf per month on a triple-net basis.
