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.
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.
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.
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.
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.
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.
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).
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!
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).
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.
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.
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.
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.
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.
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.
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.
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.
> 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.
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?
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.
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)
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.
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.
> 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.
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.
Lots of people spend most day light time at work anyway. There are plenty of people that are fine with rooms with no windows, especially if they are provided nice and sunny common areas.
And if you really want you can do a double ceiling that will act as a light tunnel and install skylight in the units (and I'm sure that are other better solutions)
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.
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.
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.
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.
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.
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.
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.
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
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?
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.
A lot if it wants to do interesting things.
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?
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.
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.
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.
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.
owned by amazon ..
now where should data centers be constructed, rather than arable farmland?
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.
[delayed]
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?
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.
New York City: Hold my Negroni aperitivo. I have faith in the Big Apple administration's ability to become a leader on this metric.
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).
According to the graph in the article, NYC is doing about average, and LA/SF are the other front-runners.
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!
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).
How will he do that?
"Regardless of which side you tend to be on, it seems like it will be a useful experiment!"
I strongly disagree.
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.
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.
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.
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.
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.
How did Amazon relocate? I think most employees are still traveling to SLU to their offices.
Amazon didn't "relocate" - they just moved most of their new hiring to Bellevue.
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.
Isn't this the city of mayor "Buh bye millionaires"?
Not sure the incentives will bring a useful change.
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.
As the mayor says, "Bye!"
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.
I believe the quote was:
"the ones that leave, like, bye"
I know that commercial and residential building codes are different, but you would think converting them to residential units would fix this..
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.
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-...
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.
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.
There was a great episode of the Planet Money podcast a few weeks back that talked about boarding houses https://www.npr.org/2026/06/10/nx-s1-5851902/housing-afforda... they're apparently illegal in most places
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.
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.
> 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.
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.
Why can't we let market forces do their thing?
Lots of people spend most day light time at work anyway. There are plenty of people that are fine with rooms with no windows, especially if they are provided nice and sunny common areas.
And if you really want you can do a double ceiling that will act as a light tunnel and install skylight in the units (and I'm sure that are other better solutions)
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.
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.
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.
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.
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...
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.
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.
It's not easy, but some people are trying it! https://www.npr.org/2026/02/21/g-s1-110595/from-cubicles-to-...
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.
might depend how different the codes are. could be a really expensive retrofit. Residential and office put different stresses on infrastructure.
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
The bipartisan housing bill that Trump has refused to sign included provisions for encouraging this.