Seattle Office Market

While the pace of permitting has slowed this quarter for tenant improvement (T.I.) projects in Seattle, it is notable that T.I. spending has trended upwards after bottoming out in late-2020, when office leasing volumes hit their trough. While still below pre-pandemic levels, total permitted T.I. projects in Seattle reached an impressive $355 million in the third quarter of 2022. By comparison, tenant improvement permit issuance (by combined estimated project values) totaled $732 million for all of 2020 and $820 million for all of 2021. Meanwhile, CBRE’s Construction Cost Index shows a peak in year-over-year cost escalations occurring in 2022 (around 14%), before declining to between 2.4% and 4.3% before 2024.