SEATTLE — The commercial real estate market in the greater Seattle area continues to see more and more vacancies, as tech companies grapple with layoffs and rising interest rates.
Vacancy rates in the region jumped to 11.2% in the first quarter of 2023, up from 10.5% at the end of 2022 and nearly double pre-pandemic levels, according to a new report from Kidder Mathews.
Kidder Mathews is the largest independent commercial real estate firm on the West Coast.
Sublet vacancy also rose to 18% from 16% last quarter.
Over 150,000 tech workers have been laid off so far this year, according to layoffs.fyi. Companies with large local presences like Amazon, Meta and Microsoft have each laid off thousands.
Kidder Mathews' report described the regional office market as "clearly struggling and highly volatile at present."
Although vacancies are rising, average office rent quotes rose in each of the five markets surveyed within western Washington. In Seattle, the average office rent rose 6.1% from last quarter.
In March, dozens of hospitality workers contracted to work in Seattle Meta offices held a demonstration to call for more transparency in the company's layoffs.
Despite each cutting more than 10,000 corporate positions just in the first few months of 2023, executives at both Amazon and Meta have publicly encouraged employees to spend more time in the office.
Amazon will be requiring employees to be in the office at least three days a week beginning in May, CEO Andy Jassy announced in February.
Meta CEO Mark Zuckerberg said in March that internal analyses found that engineers who worked in the office performed better than those working remotely. Zuckerberg believes employees should "find more opportunities to work with your colleagues in person."
