Puget Sound market sees slower leasing pace amid select large deals
The Seattle/Puget Sound industrial market began 2025 on a quieter note as leasing activity slowed from prior quarters and market fundamentals showed mild signs of softening. Recreational Equipment Inc.’s (REI) 586,060-square–foot (sf) lease in the Puyallup/Sumner submarket—part of a sale-leaseback at its Sumner distribution center—was the quarter’s largest deal, followed by Alaska Air Group’s 457,212-sf renewal and expansion in the Seatac submarket. Despite these sizable deals, total net absorption for Q1 2025 registered at just 0.2 million square feet (msf)—a notable jump from the -1.3 msf recorded in Q1 2024 but well below the five-year quarterly average. Inventory increased to 244.7 msf, reflecting incremental growth in supply. As availability rises and demand softens in select submarkets, leasing momentum may continue to fluctuate in the near term.