Year in Review | 2025

Looking back at 2025 Projections!

1. Bellevue will outpace Seattle in Tech leases

CORRECT

Bellevue continued its dominance in demand, securing most of the larger tech demand – notably from expanding or new tenants to the region. Groups like OpenAI, Databricks and Snowflake made headlines. What will be interesting is where this demand starts to fall once Bellevue runs out of space, especially big-block opportunities.

2. Three of the largest five leases signed in Seattle will be professional service (not tech)

CORRECT

The five largest transactions signed in Seattle were Perkins Coie, Amazon, Tommy Bahama, Disney, Seattle Children’s, and Remitly – three of which would fall outside the true tech category. Our expectations on technology users continuing to either trend toward Bellevue or slow play leasing activity in Seattle was correct. Our hope is going into 2026, tech activity is active on both sides of the water, given how big of a contributor it is to our economy.

3. Negative Absorption will land between 500K and 1M RSF

INCORRECT

We were close on this one, but sadly a miss. We currently sit at 1.17M in negative absorption for the year. The biggest impacts to our absorption numbers come from MSFT and Intellectual Ventures move out of their Bellevue locations, the Perkins Coie downsize in Seattle and Amazon and HBO vacating their SLU properties.

4. The 10-year treasury will end 2025 below 4%

INCORRECT

I admit checking this stat every morning with hopes that this would come to fruition. At the beginning of 2025, we saw the 10-year treasury as high as 4.8%, eventually dipping below 4% in the later half of the year. We ended the year just above 4% which is notably lower than the long-term historical average of 5.5%. Capital markets within the commercial real estate space do seem to be thawing and any additional rate cuts this year would certainly help.

5. Historical Class B product will have the greatest increase in leasing velocity than any office asset in Seattle.

INCORRECT

We were dead wrong on this projection. Despite Class B product offering historical low rents and historically high concessions, most of the demand still centers around flight to quality, with tenants focusing on A+ product in A+ locations even if costs are substantially higher.