Northwest CRE Insight
September 2026
Puget Sound Industrial Market Statistics
ABSORPTION
vacancy
rental rate
construction
Total Vacancy Rates
South Seattle
Greater King
Pierce County
<10K
4.9%
3.1%
2.1%
10K - 25K
7.3%
4.1%
3.1%
25K - 50K
6.0%
7.0%
3.0%
50K - 100K
11.4%
9.4%
8.7%
100K+
10.5%
13.5%
17.2%
Trend
asking lease shell rates
South Seattle
Greater King
Pierce County
<10K
$1.47
$1.13
$1.12
10K - 25K
$1.16
$1.20
$0.98
25K - 50K
$1.27
$1.02
$0.84
50K - 100K
$1.29
$1.01
$0.60
100K+
$1.28
$0.93
$0.84
Trend
*Source: Costar (Lease Rates are NNN)
Disclaimer: The data presented herein reflects activity reported to CoStar over the trailing 60 days and is provided for general market insight only. It is not sourced from Kidder Mathews or Matt McLennan directly, and while believed to be directionally accurate, it may not fully represent actual market conditions.
Market Highlights
I write these updates looking back on the last 60 days specifically. What has transpired and changed over the preceding 60 days. Well, the last 60 days have been interesting. But I suppose I could say that about the last 4 years if I’m being honest!
I wouldn’t say the industrial market has suddenly turned a corner, but there are more signs of life out there. Vacancy is still the biggest issue we’re working through. We’re sitting at 11.8% (average) across the market, and the larger building categories continue to carry the most vacancy – including 17.2% in Pierce County for 100,000 SF+ buildings. That’s a staggering number. At the same time though, rents haven’t fallen apart. Depending on the size and submarket they’re moving in both directions, which is probably a better description of the market right now than any broad statement about rents being “up” or “down.”
What I find more interesting is what’s actually getting done. We saw several meaningful leases over the last couple months, including 291,035 SF in Kent, 166,843 SF in Sumner and 55,000 SF in Fife. The economics tell the story too. Free rent, phased occupancy, TI dollars and other concessions are still very much part of getting larger deals across the finish line.
Sales have been active as well. Seattle industrial investment volume over the last four quarters reached $2.87 billion, up 49% year-over-year, although some of that increase is being driven by portfolio activity. Q2 alone saw just over $1.0 billion trade, up 74.6% from a year earlier. Nationally, industrial volume is moving in the same direction, with $34.3 billion over the last four quarters, up 16.1%.
Locally, we’re seeing everything from a $55 million Tacoma industrial sale to smaller owner/user transactions, along with a surprisingly active IOS market. Four IOS sales in our comp set traded in July and August alone, ranging from about $20 to $67 per land SF.
So, my takeaway hasn’t changed dramatically from the last TILT Report, but I think it has moved forward another step. There is still too much vacancy, landlords still have to compete for tenants and deals still take significant work. But people are transacting. Tenants are making decisions, buyers are writing checks, and owners are adjusting to where the market is instead of where they wish it was.
That feels like progress.
-Matt
Frequently Asked Questions
What is the current industrial vacancy rate in the Puget Sound region?
As of September 2026, overall industrial vacancy across the Puget Sound market averages around 11.8%, per Kidder Mathews broker Matt McLennan's Tilt Report. Vacancy is highest among larger buildings, with properties over 100,000 SF in Pierce County reaching 17.2%.
Which submarket has the highest industrial vacancy rate?
Pierce County carries the highest vacancy among large industrial buildings, with properties over 100,000 SF sitting at 17.2% vacant, compared to 13.5% in Greater King County and 10.5% in South Seattle for the same size category, based on CoStar data cited in Matt McLennan's September 2026 Tilt Report.
Are industrial lease rates rising or falling in the Puget Sound region?
Direction varies by submarket and building size rather than moving uniformly. Matt McLennan's September 2026 Tilt Report shows asking shell rates trending down in South Seattle, up in Greater King County, and down in Pierce County, with no single market-wide direction.
How much industrial investment volume has Seattle seen in 2026?
Seattle industrial investment volume reached roughly $2.87 billion over the trailing four quarters, up about 49% year-over-year, with Q2 2026 alone totaling just over $1.0 billion, a 74.6% increase from the prior year.
How does Seattle's industrial investment growth compare to the national market?
Nationally, industrial investment volume totaled about $34.3 billion over the trailing four quarters, up 16.1% year-over-year, a notably slower growth rate than Seattle's reported 49% increase over the same period.
What concessions are landlords offering on large industrial leases right now?
For larger industrial leases, landlords are still commonly offering free rent periods, phased occupancy schedules, and tenant improvement (TI) allowances to help close deals, according to Matt McLennan's September 2026 Tilt Report.
What are some recent notable industrial lease transactions in the Seattle/Tacoma area?
Recent large leases include 291,035 SF in Kent (Cowboy Space), 166,843 SF in Sumner (Evo), and 55,000 SF in Fife (MWI Vet), all closed in the months leading up to September 2026.
What is a recent example of an industrial building sale in the Puget Sound region?
One notable recent sale is Tacoma Central Logistics, which traded for $55,000,000 ($221.74 per square foot) in August 2026.
How active is the industrial outdoor storage (IOS) market in the Puget Sound region?
The IOS market has been active, with four comparable IOS land sales trading in July and August 2026 alone, at prices ranging from roughly $20 to $67 per square foot of land.
What is the outlook for the Puget Sound industrial market heading into Q4 2026?
Vacancy remains elevated and landlords are still competing for tenants, but leasing and sales activity have picked up, suggesting the market is gradually moving forward rather than turning a sharp corner.
