— By Andrew Hitchcock of CBRE — The Puget Sound industrial market is showing signs of modest recovery through the first half of 2025. Tenants are increasingly seeking flexible leases, renewing in place and right-sizing operations, resulting in smaller or more cautious leasing commitments rather than long-term deals. Shifts in port activity have also affected leasing decisions, exacerbated by the raft of universal tariff announcements in April. While some submarkets have regained momentum after a slow start, demand across the region is still uneven, with lingering uncertainty keeping vacancy rates elevated. Submarkets demonstrating momentum include Tacoma, which recorded 308,153 square feet of positive net absorption in the second quarter, alongside notable third-party logistics provider (3PL) leasing activity. The Seattle Close-In area also saw vacancy decrease to 9.3 percent, driven by healthy tenant demand from companies like Evergreen Goodwill and South West Plumbing. Conversely, Kent Valley faced challenges. The vacancy rate climbed to 8.4 percent due to significant speculative deliveries that outpaced absorption and traditional users downsizing. Port activity temporarily dampened demand, compounded by a 21.2 percent year-over-year drop in international imports in May. This reflects uncertainty surrounding future tariff rates. On the plus side, year-to-date container volumes remain above 2024 …
