Q1 2026 Pacific Northwest Retail Market Report
RETAIL MARKET OVERVIEW
Washington state retail continued to struggle in the first quarter. Cap rates rose for the 2nd quarter in a row and for the fifth time in the last six quarters. Construction of new retail increased which provided a bright spot. Lease rates continue to drop as new construction has slowed in general and Landlords have started to give in a little. Vacancy rates continues to sit flat just above 4%. In the Pierce/King market, activity has been fairly solid. Two of the top three deals with respect to square feet took place in Tacoma during the 1st quarter - small victories!
| MARKET INDICATORS | Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 |
|---|---|---|---|---|---|
| ↑ 12 Mo. Net Absorption (SF) | (638,060) | (752,929) | (1,028,173) | (528,138) | (152,385) |
| - Vacancy Rate (%) | 4.1% | 4.1% | 4.0% | 3.8% | 3.4% |
| ↓ Avg NNN Asking Rent PSF | $30.05 | $30.30 | $30.94 | $30.09 | $29.41 |
| ↓ Sale Price PSF | $321.31 | $337.00 | $344.60 | $394.51 | $282.82 |
| ↑ Cap Rate | 6.47% | 6.30% | 6.10% | 6.60% | 5.50% |
| ↑ Under Construction (SF) | 297,144 | 259,885 | 295,243 | 266,118 | 460,713 |
| ↓ Inventory (SF) | 174,443,908 | 174,594,704 | 173,930,109 | 175,075,101 | 181,802,871 |