What Does the National Office Recovery Actually Mean for Seattle Tenants?

Cushman & Wakefield released its Q2 2026 US Office MarketBeat on July 9. National vacancy came in at 20.1 percent, down 10 basis points year over year, a second consecutive annual decline. Vacancy fell both quarter over quarter and year over year in 49 of the 92 markets the firm tracks.

Q2 net absorption was negative 360,000 square feet, but the four-quarter rolling total sits at positive 14.3 million square feet, which Cushman calls the seventh consecutive quarter of improvement and the strongest level since 2020.

Supply is doing most of the work. Vacant sublease space fell 15.4 percent year over year to 95.6 million square feet, now 1.8 percent of US inventory. Four-quarter completions of 15.6 million square feet are the lowest since 2012, and US inventory has shrunk 0.6 percent over five quarters as buildings convert or come down. CBRE's Q2 2026 figures agree on a different base: 18.3 percent overall vacancy, 12.3 percent prime. Colliers logged 22.8 million square feet of Manhattan leasing in the first half, the strongest since 2002.

None of that is spin. It is a real, broad, supply-driven recovery. It is also happening somewhere else.

Because Puget Sound is not one of the 49.

Kidder Mathews put regional office vacancy at 23.4 percent in Q2 2026, up 30 basis points, on net absorption of negative 46,836 square feet. Regional asking rent slipped to $32.76 per square foot, down 1.0 percent year over year. Downtown is worse: Kidder shows Seattle CBD at 34.9 percent vacancy with Seattle Close-In giving back 247,471 square feet, on $35.85 overall asking rent and $40.29 for Class A.

The cleanest proof that the national headline does not travel comes from Cushman itself. The firm that published 20.1 percent nationally published 28.6 percent for Puget Sound in the same quarter, up from 27.6, on year-to-date absorption of negative 386,368 square feet. One firm, one quarter, one methodology, 8.5 points of spread.

That is the whole argument. This is not a national office market. It is 92 local ones, and Seattle sits near the bottom.

You will hear some version of this: national vacancy is falling, sublease is down 15 percent, nothing is getting built, the tenant's market is over. Do not argue with it. Confirm it, then move the frame.

Say this, close to verbatim: "Agreed, and that Cushman report is accurate. Cushman also published Puget Sound at 28.6 percent this quarter against 20.1 nationally. Kidder has Seattle CBD at 34.9. Which of those three describes this building?"

Then run three questions on every figure before it enters the deal.

• Which provider. Kidder, CBRE, JLL, Colliers, Savills, and Cushman track different building universes and none agree.
• Which geography. Puget Sound, Seattle Close-In, Seattle CBD, and this building's four blocks are four different answers.
• Which quarter. A deck citing Q4 2025 describes a market that already moved.

A landlord broker who cannot answer all three has brought a press release, not a comp set.

Downtown Class B and C is where the national argument dies. Vacancy near 35 percent, negative absorption, asking rents down year over year. Nothing in the Cushman national report changes what a downtown landlord can realistically hold.

Push term-structure concessions ahead of face-rate cuts. Landlords protect the number that reaches the appraisal and the lender package, and they will trade most of what does not.

On a 10-year downtown deal the asks are free rent measured in months per year of term, turnkey improvements with the landlord carrying overage risk, a termination option priced on unamortized costs, and expansion rights struck at base rate rather than market. Then name the alternative out loud. At 34.9 percent CBD vacancy, a relocation threat is arithmetic, and every leasing agent downtown knows it.

Trophy is a separate conversation. CBRE put national prime vacancy at 12.3 percent against 18.3 overall in Q2 2026, and the Seattle towers signing large tech and AI leases behave like that prime tier. There the building matters more than the submarket.

On the Eastside. Concede it early and concede it plainly.

Kidder Mathews put East King County at 21.0 percent vacancy in Q2 2026 with positive net absorption of 248,731 square feet. Regional sublease availability fell to 4.72 million square feet, or 11.7 percent of total available space, which Kidder calls the lowest share since 2018. JLL data reported by GeekWire has technology firms at 42.5 percent of Q2 leasing, including Databricks at 142,000 square feet at Four106 and Pokémon at 369,800 at The Eight, both in Bellevue.

If your client has an Eastside requirement and a 2027 expiration, the case for waiting has weakened every quarter for a year. Say so out loud. The asks change: lock term earlier, trade length for rate, secure expansion rights while the landlord still wants the credit, and stop treating the renewal deadline as leverage itself. A tenant rep who insists everything is a tenant's market in a visibly tightening submarket loses the client on the one call that mattered.

One nuance for the room. Bellevue CBD absorbed 366,168 square feet in Q2, more than all of East King County, which means the rest of the Eastside gave space back. The Eastside recovery is a Bellevue CBD recovery until the data says otherwise.

Cushman says national sublease is 1.8 percent of total office inventory. Kidder says Puget Sound sublease is 11.7 percent of total available space. Both are declining and both are real. They are also not comparable. One is a share of every square foot ever built. The other is a share of what is on the market today. Set 1.8 beside 11.7 in a renewal deck and you can manufacture whichever conclusion you need. Ask which denominator each one uses.

That Seattle is late rather than exceptional.

Every market that recovered lagged the national number before it turned, and Seattle has the ingredients. Savills counted 2.4 million square feet of Q2 2026 leasing and 4.6 million in the first half, the strongest quarterly pace since early 2019. JLL, via GeekWire, printed positive regional net absorption near 372,000 square feet for the same quarter Kidder printed negative 46,836.

If Q3 prints positive absorption regionally, the downtown window starts closing too, and a tenant advised to wait through 2027 will have waited through the bottom. That error costs more than signing three months early. A broker who treats 34.9 percent as permanent has stopped reading data and started forecasting.

The version that survives is narrow. As of Q2 2026, downtown Seattle leverage is real and measurable, Eastside leverage is eroding, and no national average establishes either fact.

Casey Krueger here. I have watched Seattle brokers lose credibility in two directions this cycle. Some quote the national recovery to a client sitting in a Class B tower at Third and Union. Others insist the whole region is a tenant's market while their client's Bellevue landlord fields three competing users on the same floor. The second one is worse, because the client eventually finds out.

My position as of August 2026. With a downtown Seattle expiration in 2027, I go to market now and I go loud. The driver is 34.9 percent CBD vacancy, the strongest hand a Seattle office tenant has held this cycle, against a four-quarter national absorption trend that says the hand has a clock on it. I would rather sign a 2027 deal at 2026 leverage than find out in Q1 whether Seattle joined the 49.

If the expiration is on the Eastside, I would already have gone. East King County absorbed 248,731 square feet in a single quarter and regional sublease share is at a 2018 low. That market is not waiting for anybody's timeline.

I would also put the provider divergence in writing to the client before the landlord's broker gets the chance. Kidder says negative 46,836 square feet. JLL says positive 372,000. Cushman says 28.6 percent vacancy while its own national desk says 20.1. Three separate building universes, and nobody is measuring the same thing. The broker who explains that first sets the framing for the negotiation. The broker who gets it explained to them is already behind.

Disclosure: I run BrokerHQ, which builds software for tenant-rep brokers, so I have an interest in brokers doing this part well.

The denominator decides the argument. Ask for it every time.

Do Seattle office tenants still have negotiating leverage in 2026?

It depends on the submarket. Kidder Mathews put Seattle CBD at 34.9 percent vacancy in Q2 2026, which stays firmly tenant-favorable. East King County posted positive Q2 absorption of 248,731 square feet, so Eastside leverage is eroding.

Why do Seattle office absorption numbers disagree?

Providers track different building universes. For Q2 2026, Kidder Mathews reported negative 46,836 square feet of regional net absorption while JLL, via GeekWire, reported roughly positive 372,000. Cite the provider, the geography, and the quarter with every figure.