alt.hn

7/4/2026 at 6:42:24 PM

As downtown Seattle offices empty, city facing years of 'zombie' towers

 https://www.seattletimes.com/business/local-business/as-downtown-seattle-offices-empty-city-facing-years-of-zombie-towers/

by petethomas

7/4/2026 at 8:19:33 PM

Seattle here, and a real estate nerd.

This is almost entirely an artifact of the financial instruments used to pay for these buildings, regardless of any Seattle policy changes. The Seattle Times has always been a conservative rag, and their editorial board hates the new mayor, so they hit the "Seattle is dying" story as often as possible. They've got a long history of this whenever there's leadership they don't like, ask me about it!

In Bellevue, office vacancies are low because most have long term tenants - even if the spaces aren't full of workers, the companies paying for them can continue to do so.

In Seattle, most office space is leased by smaller companies. We have diversity in availability, which is great, we have tiny office leases available as well as big ones. I believe those smaller spaces also often had shorter leases.

There are some spaces in Seattle where an anchor tenant (Indeed with 11 floors in the 2+U building at 1201 2nd Ave is a good example) shrank the footprint they use, and quickly sublet floors they aren't using. Those sublets can be priced appropriately for the market, and the main tenant keeps paying the original lease price.

However, when a space loses a tenant, the bank can't just drop the price for the owner, the same as you can't just pay less on your mortgage if you get a lower paying job. That has to go through a long, painful process, and usually the building will end up sold before pricing can change.

This is lag. It's easy to correlate it with a choice by Amazon or with new taxes, but there's quite a bit of demand for office space in Seattle, just not at the prices the owners are forced to ask with their financing instruments.

We just saw another building turn over, US Bank Center. The new owner bought it at a price where they'll be able to lease it competitively, and it won't sit empty. We'll see that continue to happen.

by Schiendelman

7/4/2026 at 7:40:10 PM

The article notes that the US overall office vacancy rate is 23%. Seattle is 37%.

Have we reached "peak office" at last?

How many people in offices does society really need, anyway?

by Animats

7/4/2026 at 8:13:40 PM

Could be Seattle tax/revenue policy. Bellevue WA, the only nearby comparable but smaller tech hub city, has 25% vacancy and expected to drop below 20% - according to Fable.

by rhyperior

7/4/2026 at 7:49:00 PM

A lot if it wants to do interesting things.

by piker

7/4/2026 at 7:58:05 PM

Are you saying we need to be in the office and not remote to do interesting things?

Or are you misunderstanding the context and talking about employment or something?

by GroksBarnacles

7/4/2026 at 8:12:31 PM

Yes. I think remote works for a lot of people, but at a societal level we need real-time in person collaboration among a large swath of society to accomplish interesting tasks. I say that as someone who works entirely from home and really enjoys it.

by piker

7/4/2026 at 6:58:56 PM

Back in 2019, I was amazed to learn just how many buildings in Seattle's downtown were Amazon offices. IIRC, it was dozens of buildings, some entirely owned by Amazon, some WeWork leases, etc. Downtown isn't very big, so that's a huge presence.

It was also fun to check out the company-city that is Redmond, not far away.

Seattle's a great city, and it's got great tech presence. I'm optimistic for its recovery.

by wxw

7/4/2026 at 7:46:18 PM

The neighborhoods they built that stuff in (mostly South Lake Union and Denny Triangle) used to be so sleepy in 2010 and earlier. It was a big transformation.

by asveikau

7/4/2026 at 8:08:29 PM

Earlier than that, they were actively dangerous. I spent a lot of my childhoold in Belltown, and it was not a safe place in the late 80s and early 90s.

SLU and Denny Triangle are amazing now. Those are some of the few places with restaurants open into the evenings. Amazon, like them or not, does a great job prioritizing local businesses in the retail spaces in their buildings. They can't all survive, but they've had a good track record.

by Schiendelman

7/4/2026 at 7:05:18 PM

owned by amazon ..

now where should data centers be constructed, rather than arable farmland?

by rolph

7/4/2026 at 8:05:46 PM

It’s an interesting thought. One wonders if a lot of the utility infrastructure they need would be more readily available and/or be less negatively impactful to build as well.

by bartread

7/4/2026 at 8:12:18 PM

at face it seems like it would be "retooling" rather than ground up construction, with foundations for connection infra, it should go up fast, and easy if AMZ already owns it.

by rolph

7/4/2026 at 7:45:10 PM

What's the point of the "recovery" in terms of stuffing people back to the offices when they can successfully perform their work from home?

by pllbnk

7/4/2026 at 7:38:08 PM

Wasn't the shared-workspace business model to take advantage of these vacancies?

Despite the graph shown in the article, I have to wonder if this is really a new problem.

by sublinear

7/4/2026 at 8:29:45 PM

Convert some to cheap residential. Solves both problems: affordable housing as well as rebalancing supply and demand for office space.

by AvAn12

7/4/2026 at 7:11:07 PM

New York City: Hold my Negroni aperitivo. I have faith in the Big Apple administration's ability to become a leader on this metric.

by delichon

7/4/2026 at 7:59:45 PM

NYC appears to be at least somewhat ahead on converting older office stock to residential stock, and I don’t expect the current administration would attempt to slow that down (it has no particular political valence in the city that I can discern).

by woodruffw

7/4/2026 at 7:21:43 PM

According to the graph in the article, NYC is doing about average, and LA/SF are the other front-runners.

by Terr_

7/4/2026 at 8:29:53 PM

SF will recover after a few more AI billboards

by ro_bit

7/4/2026 at 7:53:31 PM

It will be interesting to see how that changes with mamdani. Depending on who you ask, it will either bring in the Utopia or it will be a devastating waste, but very few people expect not much to change.

Thing is, it takes years to move so it will be a while until we see the results. Regardless of which side you tend to be on, it seems like it will be a useful experiment!

by freedomben

7/4/2026 at 8:03:27 PM

"Regardless of which side you tend to be on, it seems like it will be a useful experiment!"

I strongly disagree.

by burritoAlPast0r

7/4/2026 at 8:07:22 PM

Mamdani is going to destroy the entire pre-1974 multifamily housing stock of the 5 boroughs. It will happen really quickly (values already down 40%, 11% of owners are behind on their mortgages).

by jonfromsf

7/4/2026 at 8:31:07 PM

Even if (a big ‘if’) that’s true, how is stock being destroyed? Investment returns maybe, but not supply.

by zbentley

7/4/2026 at 8:10:44 PM

How will he do that?

by garbawarb

7/4/2026 at 8:18:07 PM

Yet rents won't drop -- the commercial mortgage covenants prevent landlords from dropping rental rates, so they'll just sit there fallow until the market recovers.

by beambot

7/4/2026 at 8:23:03 PM

Or until more rational covenants exist. Markets are largely rational economically.

by calvinmorrison

7/4/2026 at 8:26:31 PM

Seattle has a few confounding factors: - Higher taxes that are not present in surrounding cities - A public school system that is hot garbage compared to 20 years ago (Eastside schools are still ok) - Amazon as of almost a decade has been pushing hiring to their Eastside offices, and trying to freeze headcount in the state overall - Lots of the engineers you want to hire live on the Eastside

Short term, Bellevue is a better place to have your office. Mid term, the big winners are Texas, Vancouver (CA) and India. A little longer term, the lower end of all those jobs are gonna anyway in a puff of tokens.

by a34729t

7/4/2026 at 7:05:34 PM

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.

by fragmede

7/4/2026 at 7:12:38 PM

Isn't this the city of mayor "Buh bye millionaires"?

Not sure the incentives will bring a useful change.

by readthenotes1

7/4/2026 at 8:07:30 PM

No, that's the rhetoric. The reality: states like Massachusetts which have passed higher taxes on millionaires haven't seen the predicted exodus of millionaires. Mayor Wilson knows this and isn't taking dire predictions seriously. If you're gonna move, move, but it's not going to be because of that -- it's gonna be something you'd do anyhow.

Meanwhile, in the real world, Washington’s real GDP rose 1.1% to almost $730 billion between the fourth quarter of 2025 and the first quarter of 2026 -- substantially ahead of the overall pace in the US. Anthropic just signed a least for a 113,000-square-foot space in the South Lake Union neighborhood.

by BryantD

7/4/2026 at 8:16:13 PM

Yeah, when I hear about how the tax changes are going to result in a huge exodus of millionaires it's not backed by data. The data shows millionaires actually move LESS than the general population. Places that instituted high taxes didn't see an exodus. It turns out if you have a great city with great physical and social infrastructure, people want to be there. Seattle is building both. The physical infrastructure is better now then when I moved there 10 years ago. I just took a train to Bellevue from downtown Seattle for a couple bucks. Waterfront looks amazing and beautiful now. City is really clean.

by mempko

7/4/2026 at 6:59:28 PM

[dead]

by onetokeoverthe

7/4/2026 at 7:20:03 PM

[flagged]

by bebe9494i4

7/4/2026 at 7:22:48 PM

If that isn't just anti-immigrant snark, it is at least not reading TFA.

by Terr_

7/4/2026 at 7:27:10 PM

As the mayor says, "Bye!"

by xhkkffbf

7/4/2026 at 7:49:20 PM

You’d think that, right, but even cities that welcome businesses are having a hard time. Even Dallas is at like 30% empty office space.

I’m sure the factors are different for every city but I think remote work and companies preferring to build campuses outside of major cities is a big driver.

by felix-the-cat

7/4/2026 at 7:36:48 PM

I believe the quote was:

"the ones that leave, like, bye"

by ajay-b

7/4/2026 at 7:05:30 PM

I know that commercial and residential building codes are different, but you would think converting them to residential units would fix this..

by Avicebron

7/4/2026 at 7:10:12 PM

The article goes into this:

> The city of Seattle estimates that, with aggressive incentives, conversions could generate up to 6,000 housing units over the next seven years. At a rough approximation, that would use around a fifth of the city’s present office surplus.

> But “potential” is doing a lot of work here.

> Newer, larger office buildings, like the U.S. Bank Center, are hugely impractical for conversion, thanks to massive floor plates, centralized plumbing and other utilities and a host of other constraints.

> The preferred candidates are typically smaller, older buildings, especially those with C- or E-shaped floor layouts, which make it easier to create smaller units with adequate windows.

> But these buildings can be prohibitively costly to bring up to seismic and energy building codes, said Jen Pasquier, a Seattle developer who wants to convert the 10-story Liggett Building, at Fourth and Pike, into 93 apartments.

by skybrian

7/4/2026 at 8:00:47 PM

There have been some attempts to convert office buildings with large rectangular floors into long, narrow apartments so every apartment has a window. It's possible, but difficult.[1]

Plumbing and sewerage turns out to be a huge headache. Large office buildings often have all the plumbing and sewerage in a small vertical core. The rest of the building is just flat slabs on columns. Adding a sewer line means punching through the floor and hanging pipe in the space above the apartments below. If you're in SF and want to see what that looks like, park in the 4th and Mission garage on the lower level, where you can see the plumbing from the restaurants above hanging from the ceiling. Also, sewer lines are gravity fed, with a 2% slope typical. Long pipe runs get lower along the run, so you probably have to put them along a wall. Then you have to hide and soundproof that stuff, although you might be able to get away with leaving it exposed if you market to hipsters or sell it as low-income housing. If the original building has enough ceiling height, it's easier.

Then there's HVAC, exhaust ductwork for kitchens and bathrooms without windows, partitioning the electrical distribution for the individual units, fire breaks between units, etc. Overall, it's maybe 30% cheaper than a new building, and all custom work requiring experienced people. If botched, it can be more expensive than a new building.

One company that does such conversions admits they're building tomorrow's slums.

And then there's the fundamental problem that if jobs are leaving the downtown core, why have more housing units there?

[1] https://www.pbs.org/newshour/economy/analysis-heres-what-it-...

by Animats

7/4/2026 at 8:00:50 PM

The regulatory process in Seattle is fairly painful, which raises the bar for even some of those smaller, older buildings. It'd help to change that, even though it wouldn't consume the majority of the surplus.

by BryantD

7/4/2026 at 7:16:23 PM

So convert those buildings to giant dorms. Lots of younger people would be more than happy with such an option (as long as it's priced accordingly of course)

Can also combine with capsule hotels.

by qpricjalcbeu

7/4/2026 at 7:31:08 PM

Large parts of the floor would be illegal to hand to anyone due to lack of natural light: They are only reasonable for offices because most of the floor doesn't have full walls, or said walls are transparent. They are also in locations where you might not want to live anyway, as there's minimal commercial support around the building for the services you would need if living in a weird, limited apartment.

It's a bit like how suburban commercial areas are now in trouble because there are fewer companies interested in the big box anchors, and without them many a strip mall stops making economic sense. But there at least the anchor is just a big empty box, not an 8 or 9 digit investment.

by hibikir

7/4/2026 at 7:49:51 PM

Seems like a creative opportunity. Each floor could be apartments on the outside with a shared workspace or coffee shop or gym in the middle. Or even do stuff like hydroponics.

by Melatonic

7/4/2026 at 7:36:51 PM

> Large parts of the floor would be illegal to hand to anyone due to lack of natural light:

This is weird regulation to me. Why it is not allowed for apartment, but it is OK for office? Both buildings are sheltering humans, just during different stage of being awake.

by general1465

7/4/2026 at 8:01:59 PM

1000m² with one window wall: do you think that's an open-plan office or an apartment? And you can't really split it into ten, an apartment with e.g. 5m of windows and 20m depth doesn't work.

by Arnt

7/4/2026 at 7:42:51 PM

Like the GP said: in offices the floor is often a big open space where light from windows can extend a long way. But once you start dividing up that big space into smaller residential units with walls, that light gets blocked.

by TFNA

7/4/2026 at 7:53:04 PM

I don't think bedrooms really need windows and in some ways they're preferable with the light & noise reductions.

Even if that's solved the bigger problem is earthquake code. These older buildings aren't up to modern code and significant renovations would require structure changes.

by treis

7/4/2026 at 7:25:38 PM

In the 2010s Seattle briefly legalized SRO-like "pod apartments" of 300-400 sq ft, and several were built. A friend of mine rented one for several years and it was fantastic. But nothing makes NIMBYs throw a shitfit like the word "SRO" and they were eventually made illegal again.

by Analemma_

7/4/2026 at 7:31:46 PM

SROs done right would be such a huge, easy win for so many cities. When I was fresh out of uni, I rented rooms for cheap with all utilities included. It was great, given the price.

by jjice

7/4/2026 at 7:19:04 PM

On top of the architectural challenges and efficacy of it, you have to contend with the terms of the bank loans that apply. Those are why the buildings "can't" lower rents to attract new business.

If they sign a lease at a new lower rent it basically triggers a re-check of "can they repay the loan based on their rental income?", which comes back as "no". That trigger _doesn't_ occur if you just leave the building empty, with _no one_ paying rent, because your last mark to market rent was high enough.

Fundamentally changing the type of tenant in the building would presumably trigger that check as well.

It's a shell game that eventually leads to the loan defaulting, but both the bank and the building owner are happy to pretend they can't see the train coming down the tracks at them.

For an example of this in Seattle that everyone was calling years ahead of the collision, see the Martin Selig sagas https://deepnewz.com/real-estate/seattle-developer-selig-war...

by hirsin

7/4/2026 at 7:31:21 PM

It's actually probably better as an art piece now that the I think about it.

Giant, vacant towers locked by some asshole sitting in their second home in Nantucket, while hordes of homeless mill around the bottom.

by Avicebron

7/4/2026 at 7:56:51 PM

On top of architectural issues like plumbing and access to windows, cities like NYC have programs where converting economically obsolete offices to residential exempts the building from property taxes if at least some units are for low-income renters.

by kccqzy

7/4/2026 at 7:16:25 PM

I live in a converted office building I. Downtown Chicago . But it was built in 1913. Newer office buildings are less practical to convert due to larger floor plates. Older office buildings are smaller or have light wells etc.

by cozzyd

7/4/2026 at 7:16:19 PM

might depend how different the codes are. could be a really expensive retrofit. Residential and office put different stresses on infrastructure.

by forlorn_mammoth

7/4/2026 at 7:10:56 PM

Apparently it's really expensive to convert to meet reasonably sane residential standards.

Add in required shrubbery, section 8 housing set-asides, rent control, etc., it becomes unattractive -- especially if the jobs have moved to business friendly suburbs

by readthenotes1

7/4/2026 at 7:11:49 PM

The bipartisan housing bill that Trump has refused to sign included provisions for encouraging this.

by idontwantthis

7/4/2026 at 7:47:07 PM

If you haven't lived in Seattle, it's hard to understand the problem. It's multifaceted; business climate, generally poor quality of the city itself as a walking / working destination, extremely hostile to business city government, and greener pastures (literally) east across the bay, which happen to be closer to some very large headquarters.

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, and there is so little planning, zoning or effective change happening it seems likely to be decades before I could imagine a truly vibrant city core. Even when I write that, it seems unlikely. As we speak, Seattle is aiming to become the highest tax jurisdiction in the country, higher even than NYC, because ... revenues are down. It's a disappointing response to a serious urban problem.

by vessenes

7/4/2026 at 7:59:51 PM

Seattle here. The problem isn't that there's too little "planning" or "zoning". Where that's relevant, there's too much. The city has used those tools over and over to slow growth and tack on requirements for businesses.

I'm not aligned with the new mayor's business-hostile policies. But as far as making the city better for walking, things are going very well. We've been narrowing crossing distances, improving sidewalks, putting in concrete separation for bike lanes, we even finally kicked cars out of Pike Place Market. There are parks improvements in progress across the city to improve restrooms and fix dangerous spots. And the number of people in tent encampments has dropped dramatically, it's become rare and short lived in most of the city.

I suspect that we will continue to recover, despite the capital gains tax. It'll just be slower than Bellevue.

by Schiendelman

7/4/2026 at 7:51:19 PM

Seattle's DT business district had always been uniquely bad. Everything is for office workers and closes at 5pm. There is nothing else but offices and restaurants serving coffee for breakfast and workplace meeting suitable lunches.

It is an example of piss poor planning and urban design.

by com2kid

7/4/2026 at 8:05:35 PM

We made a lot of gains there just before covid, but it's a fight against empty space. We simply need more residential growth in the core. South Lake Union has improved a lot in the last two years, and Denny Triangle is coming along too. That will help north downtown, it's just going to take time, and there's not much we can do now to speed it up.

There was a 1993 initiative that seriously fucked up our planning process, and created 'design review', which is designed to add a year or two to building a building by having architects and retirees shit on everything. It's very hard to roll those things back, because many people believe public input is inherently good.

Pioneer Square is its own mess - it's that we have too much control, so we made it nearly impossible to build more market rate housing there to support evening and weekend destinations.

by Schiendelman

7/4/2026 at 7:50:22 PM

How did Amazon relocate? I think most employees are still traveling to SLU to their offices.

by DenisM

7/4/2026 at 7:52:19 PM

Amazon didn't "relocate" - they just moved most of their new hiring to Bellevue.

by Schiendelman

7/4/2026 at 8:27:00 PM

I've lived all over the country, but most recently in the Seattle area (across the lake in Kirkland) for 4 years.

Seattle has trappings of a city, but socially it doesn't feel like one in the way Chicago and NYC. To me, it feels like Cleveland but with more money.

I couldn't quite put my finger on it, but I would visit different neighborhoods from Capitol Hill to ID to Ballard (I liked Ballard the most) almost every weekend, and everything just felt so subdued compared to a city that is truly alive. I had to take trips to Vancouver -- a similar city but more alive -- just to get my dose of city energy.

The city itself has too much monoculture -- predominantly tech bros or hipsters or nature people -- but that's not enough diversity to create true energy.

The food scene was uniquely mediocre relative to its wealth and size. It had pockets of good stuff, but overall just very little risk-taking and experimentation in the restaurant industry because of the economics (min wage is $21.30 which is fair to workers but hard for small business owners) and insufficient population density to turn tables at a high rate (the land is fragmented by water and mixed elevation), and high proportion of food-as-fuel population.

Seattle attracts who it attracts because of what it is -- introverted, nature loving, affluent in a countercultural way. But this does not create a vibrant city.

The energy resembles that of a paradoxical population who want to live in a city but are secretly suburban people.

by wenc

7/4/2026 at 8:11:49 PM

The city has a notorious open air drug market within 2 blocks of one of its main tourist attractions at Pike Place. Downtown is generally not a pleasant place to visit.

by seawolf874