Seattle's Office Real Estate: High Vacancy & Repurposing Challenges

Seattle, WashingtonPhoto byThom MilkoviconUnsplash

As Seattle employees return to offices after recovering from the pandemic of 2020, much of the office space remains vacant. At this time, vacancy rates still remain as one of the highest in the nation. New office construction is much lower than in recent years.

In the past year, Seattle has seen a slowdown in construction per a report on market trends for offices from CommercialEdge. Currently, there are approximately 2.1 million square feet of commercial office real estate. This is in comparison to the 6.6 million as recently as July of last year.

Unfortunately, vacancies are high and nearly one quarter of the office space in downtown Seattle, is dormant. As more leases expire and more employees are choosing to work from home at least part of the time, many offices are going to remain vacant for the long-term.

So, what is Seattle going to do with all of this empty space? According to local State and Federal officials, they’re looking to encourage developers to repurpose office space in to more housing, and research facilities.

Maybe they’ll set more of this space aside for helping to rehome the homeless. How about the immigrants? There are many options available for Seattle. Recently, Washington’s Legislature approved a law allowing developers to defer sales and use the tax money if they take the time to convert existing structures into affordable housing.

Larger cities like Seattle, Spokane, and Everett are considering these options. Many such projects are exempt from state regulatory fees. Many other regions are adopting this as a solution to so many empty offices however, Washington State appears to be slightly behind on this trend. What do you think? Should empty offices be converted to housing and research facilities?

The main issue that construction crews have to deal with is outdated plumbing and heating systems as well as window access and updating utilities. While the idea is good in theory, it is time consuming to convert plumbing and outdated electrical systems not to mention expensive.

Another issue is that there are also zoning requirements and historical preservation restrictions that must be considered to maintain the integrity of historical buildings. Conversions are going to be slow at best due to these stumbling blocks.

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