COVID-19 likely to stall or reverse rent growth seen over past two years
Seattle was one of the first U.S. cities seriously impacted by the rapidly evolving novel coronavirus pandemic and, at the end of March, Governor Jay Inslee issued stay-at-home orders to help prevent the spread of the virus. Office occupiers swiftly implemented remote-work policies as all non-essential businesses were forced to close. Prior to any COVID-19 related disruption, asking rents in Seattle continued to climb. In the first quarter of 2020, the overall average office rent was $39.38 per square foot (psf), reflecting increases of 4.7% over the last year and 2.4% over the quarter. Rents ranged from a low of $25.74 psf in Tacoma, to a high of $47.48 psf in Downtown Seattle. Class A rents increased by 4.3% year-over-year and 1.5% over the quarter, now standing at $48.28 psf. This growth is likely to stall or reverse as market uncertainty and a halt in activity will lead to downward repricing.