Seattle's office towers sit a third empty, and rents won't budge

Downtown Seattle, a third of it dark

I couldn't open the Seattle Times piece directly, so the figures below come from readers quoting it in the thread. The anchor number: US office vacancy sits near 23%, while downtown Seattle runs about 37%. John Nagle read both straight off the article.

"The article notes that the US overall office vacancy rate is 23%. Seattle is 37%. Have we reached 'peak office' at last?" — software veteran John Nagle

Everyone names the same trigger: Amazon. One reader remembered dozens of downtown buildings under Amazon's name in 2019, some wholly owned, some WeWork leases, a huge footprint in a small core. Then hiring drifted east to Bellevue and the Eastside, where the campuses and the engineers already were.

The floors are empty because the debt says so

The sharpest reversal reframes vacancy as a financing problem, not a pricing one. Rents don't fall to meet demand because the loans won't let them.

"the commercial mortgage covenants prevent landlords from dropping rental rates, so they'll just sit there fallow until the market recovers." — robotics founder Travis Deyle

Ben Schiendelman, a Seattle founder who has worked at Indeed, Apple, Amazon and Microsoft and calls himself a real-estate nerd, pushed further: the crisis is structural, and the coverage is slanted.

"This is almost entirely an artifact of the financial instruments used to pay for these buildings, regardless of any Seattle policy changes." — Seattle founder Ben Schiendelman

He points to Bellevue, where vacancies stay low because long-term tenants keep paying whether or not the desks are full. Not everyone buys the it's-just-finance read. Investor vessenes, founder of New Alchemy and a former Bitcoin Foundation chairman, blames the city itself.

"The die was largely cast when Amazon called Seattle's bluff during COVID and relocated, but so much needs to be done to make the city itself an attractive place to live and work…" — private-equity investor vessenes

Just turn them into apartments, if only

The obvious fix draws the obvious chorus: convert the towers to housing and solve two problems at once. The catch is that office floor plates, plumbing and zoning fight the conversion, and someone has to eat the loss.

"Zoning and other regulations getting the way of it being used. The city 'just' needs to incentivize it getting used, and someone's gotta come to terms with losing money." — a reader on the conversion math

That last clause is the whole story. A tower stays a zombie not because no one wants the space but because its owners can hold a fully-priced lease on paper longer than they can admit the building is worth less. The vacancy ends when the debt is refinanced or written down, not when the mayor changes.