According to a report by Broderick Group, the Eastside office market ended the fourth quarter of 2024 with mixed results. While there were challenges like high vacancy rates across the region, Downtown Bellevue remained a key location for businesses, especially in the tech industry.
Downtown Bellevue’s Recovery
Despite concerns about major changes, like Microsoft’s move to vacate over 3.9 million square feet and migrate over to Redmond, Downtown Bellevue remains a top spot for businesses. The area saw major leasing activity this quarter, with well-known companies like Walmart, Snap, GE, and Zoom signing deals. Walmart expanded by 98,000 square feet at Skyline Tower, and Snap added 38,730 square feet at Midstation Bellevue. These deals show that the area is still highly sought after, especially for companies looking for ready-to-use office spaces.
Market Dynamics
Overall, the Eastside office market experienced an increase in vacancy rates, with the region’s vacancy rate at 19.2% by the end of Q4 2024, slightly down from earlier in the year. While this marks a challenge for landlords, the market has adjusted, with tenant demand still strong in select areas, most notably in Downtown Bellevue.
The market is currently in favor of tenants, especially in suburban areas where there’s an oversupply of office space and higher vacancy rates. However, suburban markets typically take longer to recover, often trailing behind Downtown Bellevue’s progress by 18 to 24 months.
Key Developments and Future Trends
Looking ahead, Downtown Bellevue will see a significant uptick in available office space with projects like Four106 and Bellevue 600 slated for completion in 2025. These new developments, especially Amazon’s Bellevue 600, will continue to shape the city’s office landscape.
Landlords are prioritizing “flight to quality” trends, emphasizing the importance of offering modern, high-quality office spaces in prime locations to attract tenants.
Although vacancy rates remain high, Downtown Bellevue’s steady leasing activity and growth in the tech sector highlight its resilience. While leasing has slowed across the Eastside, Bellevue is well-positioned for ongoing recovery, driven by a focus on quality and move-in-ready spaces.
