The Seattle retail market is cautiously optimistic, with low vacancy rates and pent-up demand across the region. Leasing activity has been relatively flat, averaging 635,000 square feet in 2023. According to a new Kidder Mathews report, vacancy rates ended 2Q 2023 at 2.7%. Despite this positive sign for the sector, investment dropped from $2.5 billion in 2021 to $2.0 billion in 2022 due to rising interest rates and a lack of inventory; however 148 transactions totaling $450 million were recorded at an average cap rate of 6% during that period – up from mid-5% cap rate seen last year.
As consumer confidence remains high despite economic uncertainty being a key indicator on the market outlooks going forward; it is expected that activity will increase moderately during the second half of 2023 as retail slowly gains velocity as economy strengthens further over time
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