This is almost entirely an artifact of the financial instruments used to pay for these buildings, regardless of any Seattle policy changes. The Seattle Times has always been a conservative rag, and their editorial board hates the new mayor, so they hit the "Seattle is dying" story as often as possible. They've got a long history of this whenever there's leadership they don't like, ask me about it!
In Bellevue, office vacancies are low because most have long term tenants - even if the spaces aren't full of workers, the companies paying for them can continue to do so.
In Seattle, most office space is leased by smaller companies. We have diversity in availability, which is great, we have tiny office leases available as well as big ones. I believe those smaller spaces also often had shorter leases.
There are some spaces in Seattle where an anchor tenant (Indeed with 11 floors in the 2+U building at 1201 2nd Ave is a good example) shrank the footprint they use, and quickly sublet floors they aren't using. Those sublets can be priced appropriately for the market, and the main tenant keeps paying the original lease price.
However, when a space loses a tenant, the bank can't just drop the price for the owner, the same as you can't just pay less on your mortgage if you get a lower paying job. That has to go through a long, painful process, and usually the building will end up sold before pricing can change.
This is lag. It's easy to correlate it with a choice by Amazon or with new taxes, but there's quite a bit of demand for office space in Seattle, just not at the prices the owners are forced to ask with their financing instruments.
We just saw another building turn over, US Bank Center. The new owner bought it at a price where they'll be able to lease it competitively, and it won't sit empty. We'll see that continue to happen.
The main claims from the article seem worrysome, IN particular, the 37% vacancy rate, as well as multiple buildings underwater[3], etc.
Now, lets dissect the claims that this is part of some cycle, and not the result of new city hall management. The reality is that with Jumpstart, and with the vacancy rate, enterprises are not renting. But, the owner is stuck with the asset in what is now a hostile jurisdiction. So, even if owner may not be able to change terms on their mortgage, they certainly can charge less for rent. Empty units do not contribute to cash flows to pay the building mortage. I understand there may be consequences to lowering rents, but those consequences are coming home anyway: The building will need to be sold, at a loss, by the bank to a new owner. And as you said, that process takes time. And the jurisdiction seems hellbent to make it harder.
Now, as buildings sell, this in turn lowers the appraised value, which is key to the Seattle tax base.
So, the downtown core is going to produce far less in property taxes in the foreseeable future, with fewer tenants paying (at least in short term) occupancy taxes, etc. This is going to play out in a decade.
According to this, commercial property taxes are about 26 %[1] of the Seattle budget
Let's assume appraisals go down 50% for those impaired offices. This is not crazy, there's precendent for it[2]. That means the Seattle budget must be cut by 13%. This is not even factoring other losses from job loss, sales tax lost, etc. Maybe that's not "Seattle is dying" , but sound pretty bad ?
The financial instruments are commercial real estate loans.
Those loans often do not allow the borrower to charge lower rent.
Property taxes are not calculated that way. The property tax rate for a given year is backed into (a "mill rate") based on approved dollars of spending divided by total property value. If total citywide property value drops by 50%, the property tax rate doubles that year.
So no, the property value changes aren't really an issue.
I'll add a few bits. Commercial leases are typically "triple net" so taxes are passed pretty much directly through to tenants and land lords don't need to worry too much about them. A very visible part of the "dead downtown" effect is due to small businesses that have terrible margins, high fixed costs (including rent), and don't survive losing 20% of their customer base. And finally, anyone paying attention saw that Seattle core downtown is a highly concentrated bet on office rental to the exclusion of almost any other use of space or reason to go there.
A few years back I did an art installation in one of the storefronts at the 2+U building and in the process got to study up on some of the issues and talk to a few people, the general theme was that everyone had a vested interest in focusing on possible causes that were external and fixable within a short time. I don't think that's reality.
>Those loans often do not allow the borrower to charge lower rent.
I have never seen it substantiated that a promissory note in commercial real estate has a clause that dictates how the borrower can price their products or services.
There will be terms for the borrower to be in default if they lose too much revenue or their expenses go up too much, such as leaving spaces empty:
Whether a lender wants to foreclose on a borrower in default is far from guaranteed. Often times, they are loathe to take over management of a building so they simply work out a new agreement with the borrower.
No there won't be clauses about rental amounts. It's not that straightforward.
It boils down to collateral for the loan.
A building has a value based on future rents. The owner borrows from the bank based on that value. The building is collateral for the loan.
The rental rate (not occupancy) determines the current building value. (Occupancy affects cash-flow, but not building value.)
Reducing rent improves cash flow, which may help paying the loan, but loan payments here are not important.
What is important is that the collateral covers the loan. Reducing the rent triggers a re-evaluation of the building value, which in turn affects the loan. There's no discretion here, it's just math.
On the other hand, as long as the owner continues to pay the installment on the loan, and as long as the building remains the same value, the banker doesn't have to do anything.
Yes, there are ways the price can be fudged a bit (bundling services, remodeling allowances and so on) but the "list price" of the rent can't come down without (automatically) triggering loan problems.
Since property companies tend to have multiple properties, cash flow is sufficient to pay the loan. So that's a lot better than triggering a revaluation.
In short commercial real estate does not behave like residential real estate.
This is exactly the key - residential real estate is based on tons of pricing effects, and appraisals are much more "feels" than "reals", if you will (how people feel about the area, how they feel about the tower the previous owner added, how they feel about the location, etc).
Commercial real estate valuations are almost entirely a mathematical formula based on rents, current, whether they're collecting them or no. And if the rents drop (e.g., you start renting it at a lower square foot rate) the valuation drops, which can require recollateralization (e.g., unlike your house, the banks require that the loan NEVER be more than 50% LTV or something) so if the value of the property calculation makes it go above that, you have to pay down the loan or add additional property as collateral.
Residential real estate has a lot of sweetheart terms due to government subsidies, especially in the US. That is why you don’t see 30 year fixed rates anywhere else, and 0% down loans anywhere else.
The DSCR equivalent for residential real estate is debt-to-income ratio. In a free market, it is conceivable that lenders offer lower interest rates for borrowers who periodically prove their DTI is sufficient. That is basically what refinancing is, and what people with adjustable rates mortgages have to do.
> residential real estate is based on tons of pricing effects, and appraisals are much more "feels" than "reals",
If you have looked at a residential real estate appraisal, there is a very real process of gathering comps, evaluating the structure, discounting for wear and tear of major maintenance items such as roof, HVAC, etc. If anything, because residential real estate sales volume is so much higher than commercial, residential is more “reals” than “feels”.
> if you will (how people feel about the area, how they feel about the tower the previous owner added, how they feel about the location, etc).
Who are these “people”? Because if we are talking about appraisers, this should disqualify their license to appraise. Appraisers should be mostly looking at competitive sale prices, per sq ft construction costs of major house components, and other objective criteria. Why else would a lender pay them to evaluate a property?
>Commercial real estate valuations are almost entirely a mathematical formula based on rents, current, whether they're collecting them or no
This is not true. Try calling up a lender and asking to borrow money without showing them cash flow, and they will hang up on you.
> And if the rents drop (e.g., you start renting it at a lower square foot rate) the valuation drops, which can require recollateralization (e.g., unlike your house, the banks require that the loan NEVER be more than 50% LTV or something)
They literally do this, via DSCR. If you stop renting space, your operating income goes down, which causes the DSCR to go down, which triggers a default, which means the lender can negotiate new terms, which could involve the borrower putting up more money, extended loan terms, change in interest rate, anything.
The alternative to a loan with a DSCR is usually a 5 year adjustable rate mortgage, which usually has a higher interest rate and then in 5 years, you still have to use your cash flow to qualify for another loan, so eventually someone will want to see income for the property
> Effective CRE lending policies generally reflect the following for each type of loan or
property:
>• Minimum standards for borrower or project net worth, support provided by guarantees (if
applicable), borrower and guarantor cash flow, and debt-service coverage ratio (DSCR).
Residential real estate appraisals are done by under employed real estate agents. They’ll always find a way to justify the number that you paid, like during Covid when I bid $200k over asking for a $1M house, the appraiser didn’t bat an eye and got to that number. That was totally based on vibes.
I don’t know what “under employed real estate agents” means, but the appraiser that the lender cares about is in no way associated with the real estate agents. The lender picks the appraiser (a licensed professional usually working as an independent contractor) who submits a report to the lender, who then determines whether or not they want to use it.
Asking price also has nothing to do with market value, so offering $200k more over asking would be irrelevant to the appraiser. You should have received a report showing recently sold houses similar to the one you were buying and other physical features that justified the appraisal.
There is even an appraisal contingency in most purchase agreements that outline what to do if an appraisal comes in lower than what a buyer offers to pays. Typically, the buyer can exit the purchase and get their earnest money back, or they can put additional money down to cover the gap between the appraisal and the offer price.
If a house is getting so many bids that it sells for 200K over asking, then that is pretty clearly the market price as determined by auction. Of course the appraisal would sat that is the value because it is.
> Reducing the rent triggers a re-evaluation of the building value, which in turn affects the loan. There's no discretion here, it's just math
What is “the” rent? The building has multiple tenants (usually), at various prices. It makes no sense that there is a specific price that the landlord cannot rent at to any one tenant that “triggers” a re-evaluation.
If the lender wants a continuous view into the collateral’s value, which any lender with two brain cells to rub together would, then it would require a minimum DSCR, which they do.
>On the other hand, as long as the owner continues to pay the installment on the loan, and as long as the building remains the same value, the banker doesn't have to do anything.
This is not sufficient for most CRE loan covenants.
> And 75% of CMBS office loans have a debt service coverage ratio (DSCR) greater than 1.5x (Exhibit 9). This helps to mitigate the risk of term default (i.e., a default prior to a loan’s maturity) since the net cash flow on the properties sufficiently covers interest payments. Generally, term default risk is more of a concern when the DSCR falls below 1.25x. But only 15.5% of CMBS office loans currently have a DSCR in this range.
> Yes, there are ways the price can be fudged a bit (bundling services, remodeling allowances and so on) but the "list price" of the rent can't come down without (automatically) triggering loan problems.
>Yes, there are ways the price can be fudged a bit (bundling services, remodeling allowances and so on) but the "list price" of the rent can't come down without (automatically) triggering loan problems.
DSCR cannot be fudged this way, without engaging in fraud. That’s the whole point, looking at cash flow for the specific collateral gives the lender insight into how well the collateral is being managed and market conditions.
>Since property companies tend to have multiple properties, cash flow is sufficient to pay the loan. So that's a lot better than triggering a revaluation.
Nothing I am reading indicates this is the case. The idea that lenders would want to pretend a business is fine just because they stop selling rather than sells at a lower price than at some point in the past is not passing the smell test. If lay people on the internet can figure out the folly in this concept, then surely the people betting millions and billions can.
The discourse about commercial real estate in downtowns (well-beyond this thread) has taken on a kind of “one neat trick” wishful thinking.
If only the greedy owners or banks would recognize their massive investments had lost hundreds of billions in value due to declining demand, then… the underlying causes of that decline in demand and the consequences if it persists can be waved away?
I tried to cover this in my original comment - Bellevue hasn't lost as many tenants because they're usually larger and have longer leases. They may yet have an increase in vacancy rate.
>>> Property taxes are not calculated that way. The property tax rate for a given year is backed into (a "mill rate") based on approved dollars of spending divided by total property value. If total citywide property value drops by 50%, the property tax rate doubles that year.
When the LLCs that own the commercial buildings declare themselves bankrupt, and walk away from the asset and throw the keys on the table, who pays the 50% increase ?
The banks?
I think you're starting from two flawed assumptions.
1. Most of our largest buildings are owned by large companies. For instance, Gaw Capital owns Columbia Center. Blackstone owned US Bank Center, until it was bought by Spear Street Capital.
2. You could delete downtown and citywide property value wouldn't drop by 50%. Nothing's moving that fast, I'm just using simple math to explain mill rate.
>...If total citywide property value drops by 50%, the property tax rate doubles that year.
This claim is simply not true. Even in a budget based system like Seattle, there are hard statutory limits on how much the tax could increase.
If total citywide property value drops by 50%, the tax rate would hit its legal maximum ceiling, and the city would have to make up the money somewhere else or cut spending.
One big limitation is RCW 84.52.050 (Limitation of levies) which I think implements the 1% constitutional max allowed levy. I read somewhere that Seattle is at a levy of about 9.4, so that would be a hard limit right there.
The 1% limit is a limit on the level of the property tax. If property tax values somehow fell by 50%, in theory, the property tax rate would double to ensure city operations remain funded. However, Seattle is almost at the statutory limit right now so there isn't much room to increase the rate - I this scenario the city would hit the 1% limit and be forced to get the money somewhere else or cut its budget instead. As I initially wrote:
>...If total citywide property value drops by 50%, the tax rate would hit its legal maximum ceiling, and the city would have to make up the money somewhere else or cut spending.
And the city wouldn't even get all of the increase it is allowed as there are other tax districts who would also want a higher rate. The tax increase that would be allowed would be prorated with the other tax districts.
(The 1% revenue growth cap you referred to earlier is a different statute and a different issue.)
> So, the downtown core is going to produce far less in property taxes in the foreseeable future, with fewer tenants paying (at least in short term) occupancy taxes, etc. This is going to play out in a decade.
> According to this, commercial property taxes are about 26 %[1] of the Seattle budget
In WA state, the property tax collected isn't related to the total of the assessed value. The total tax billed across all existing properties typically goes up 1% per year (the "levy lid"), unless voters have allowed a "levy lid lift". That total is apportioned amongst the properties by value.
So if everybody's property values drop in half, their property tax rate doubles (plus a little) and their tax bill stays about the same.
Of course, if commercial property assessments drop and residential assessments stay the same or go up, commercial bills will drop and residential bills will go up. But the total tax bill will still be 1% more than last year.
An increase in vacancies across the board is reduction in demand, plain and simple.
That the new equilibrium price to re-tenant all the buildings is lower is evidence of that.
But the OP is correct that when enough of the building owners default on their debt, the building will be foreclosed, sold for less and asking rents will go down towards the new equilibrium price.
Thus occupancy is likely to improve again down the line.
But, yes, this is not a bullish situation for Seattle. Office generally hasn't been doing well nationally, so it's more of a question of relative performance.
Honestly, I think is a bullish situation for Seattle.
With vacancy this high we're likely a more attractive place to start a small company, as recollateralization and foreclosure put square footage on the market at competitive prices.
For those who compare to Bellevue - in 2025 we grew population at 0.8% to Bellevue's 0.2%. You'd never know that from the vacancy reporting.
If you look back at my original comment, you'll note I mentioned that sublets at appropriate pricing are filling quickly. Occupancy isn't appropriate for current demand. Occupancy is depressed by owners avoiding recollateralization.
And you have to wonder, what kind of boom in innovation could lots of reasonably priced office space support? What gov policy cold push landlords and banks to accept reality? Vacancy tax? Change to bank regulations?
The timeframe of regulatory changes here is not worth any investment. The turnover will continue to happen, it's too complicated to try to change, and you'd probably create nasty unexpected side effects.
I'm not sure the bank has that much to do with it.
Commercial real estate valuation is based entirely on its ability to produce income. Lower the rent, lower the value. And that's a problem because most commercial leases are long (5-20+ years) so you're locking in an asset writedown for a long period of time. So it can be better to leave it vacant and pretend the value hasn't changed.
You can still run into problems with this (eg servicing the loan). So I don't think it's quite the issue that banks have to approve lowering the rent so much as the owner might lower their asset value and have problems with the LTV and DSCR so the bank may then require you to refinance or add capital.
By the way, we've gone through this before. Up until the 1990s, law firms were by far the largest tenants of office space because they had very large law libraries. Then that went online and they downsized. This was an acpolaypse in the 2000s combined with the dot-com bust.
I think the lag you're talking about is on banks essentially foreclosing on a building and selling it off, allowing the new owners to charge less because they paid less.
Yes, that's exactly the lag I'm talking about. The banks won't allow the buildings to lease for less than they need to make per sqft to pay back their loans. They'd rather foreclose, apparently. There's some reporting around this recently, I'm not in a position to look it up today but it should be easy to find!
> However, when a space loses a tenant, the bank can't just drop the price for the owner, the same as you can't just pay less on your mortgage if you get a lower paying job.
You can always pay less on your mortgage or any other debts if you are in a crisis and negotiate with the lenders. They prefer this immensely over not receiving anything at all. And in the long run they also receive more interest this way.
It's very common especially for businesses to enter these kind of negotiations with the banks, and not very uncommon for individuals either.
So it makes much better sense for everybody involved to sublet these spaces for market value, even if that income doesn't cover the original mortgage, because something is better than nothing. Somewhere there's a giant perverse incentive in situations like this.
Your argument is that it's simply because of dropping prices. Maybe that does explain the bulk of it. But the article seems to suggest it's the WFH transition. How much of the vacancy rate would be explained by that?
Is there any reason to think WFH rates would differ between Seattle and Bellevue?
I’m not super knowledgeable in this area but GP is right the The Seattle Times is a very partisan outlet that spins confirmation bias into everything. Left-leaning politicians elected? The rain is their fault. Centrists (because this is Seattle)? They’re doing the best they can, maybe give more money to Amazon?
I can tell you specifically that Indeed dropped its footprint because of WFH. They moved into that building during covid, then shortly after introduced permanent work from home / hybrid.
The other person’s point about rents probably explains the continued emptiness but WFH definitely drove the abandonment. And that newspaper does suck.
This tracks with what I’ve heard around as well. What changed in the financial instruments?
My understanding is a lot of the loans have gone PIK or otherwise essentially aren’t serviceable at current prices. Do you think that’s resolvable somehow or just lagging implosion?
Nothing changed in financial instruments - we just don't usually have a lot of office tenants decide to walk away like we have with the advent of remote work. The loans will work themselves out. We've seen a couple of buildings trade for way less than pre-Covid numbers, and we'll see more.
In another 10 years downtown Seattle will be aligned with the rest of the market again.
CRE also includes warehouses, multifamily apartments, retail, hotels, data centers, medical.
I think we kind of lucked out that we had the start of boom in 2023 instead of a recession.
The diversification has allowed the office space price to correct without a contagion.
As a general rule, any snappy memorable line like "extend and pretend" is almost always wrong and a distortion after awhile. The idea sticks around longer than it should because it is memorable, not because it has anything to do with reality.
It's very conservative - just along certain axes that are especially locally relevant. For instance, they've opposed both our 2008 and 2016 mass transit ballot measures (both of which passed with strong support). They were supportive, until we replaced the primary owner's express onramp on Interstate 90 with a train.
Seattle Times is left leaning. Just because your pet measure of transit was opposed doesn’t make it otherwise. Calling it conservative is simply unmoored from reality. It’s also a display of what Seattle politics are like and why it has declined so much on so many facets in a short 20 years. The rampant progressive extremism is the root cause of the issues affecting Seattle. There is no balance or practical governance.
They're looking at national politics, and on that score, yes, the ST is liberal. When it comes to local politics the Seattle Times is conservative. Your objection is a bit like people who object that the Democrats are conservatives, from a European perspective, except this is about the city itself. The current mayor is liberal, the previous mayor was conservative. They're both Democrats and would be defined as liberals by your factcheck, but that's a different rubric than the one we're talking about.
As a European, Democrats are absolutely not conservative from a European perspective. There are multiple dimensions but at least socially they push everything further to the left than in Europe. (Which is also in my opinion why they are losing elections)
Almost every social topic is pushed to the extreme left by the Democrats. Simply look at how many weeks abortion is allowed in blue state and compare with most European countries. Most European countries are way more conservative.
Economically yes, they are more conservative but even that is now changing as well (see: New York and AOC).
and migrants? I think liberal parties in European countries seem to be much more supportive of refugees than Democrats, current Republican rhetoric aside. also, police, and guns. meanwhile, even with the issue you singled out, most red states in the US have enacted near-total abortion bans. do any countries in Europe ban abortion outright? are the conservative parties pushing for it?
How do Democrats’ policies on health care, paid leave from work, unions, public funding of political campaigns, and public transit compare to European conservatives?
If you’re a single-issue abortion voter, yes the US democrats tend to propose fetal viability (22 weeks or so) as the limit, while most of Europe is 12 weeks. UK and Netherlands are 24.
But if you genuinely believe US democrats are wildly liberal, you must be that rare European Fox News watcher.
It’s fortunate we’re on HN to easily identify this comment as sarcasm, but can you imagine being so ignorant as to believe this? What kind of brainwashing is required to think one could get an “abortion on demand” up to birth?
Truly such a belief could only come from the lowest IQ amongst humanity.
I think you have a particularly poor read on American politics.
>they push everything further to the left than in Europe. (Which is also in my opinion why they are losing elections)
No, the democratic electoral base is consistently and loudly complaining that after the primaries, most democrat candidates become moderates in the general election (even actively courting Republicans) and do not follow through on the primary election promises when elected. This has resulted in major democratic voter apathy and low turnout.
>Simply look at how many weeks abortion is allowed in blue state and compare with most European countries.
This is true, but you have to contextualize it to America, where people have poor or no sex ed, no access to socialized medicine, no time off from work for medical appointments, likely no public transport to the appointments, and very possibly now needing to travel out of state.
>Economically yes, they are more conservative but even that is now changing as well (see: New York and AOC).
That's very much TBD. First, NYC is not very representative of America as a whole. Second, while there has been a small wave of recent democratic socialist victories that has been well covered in the news, it is too soon to say that's a long term trend or just a Trump induced aberration. Mandani is making a splash currently, but he's just a mayor. I like AOC's politics, but she's too much of an outsider to have any real influence in Congress. She probably has more influence on social media than she does in Congress. I'm not aware of any legislation introduced by her actually becoming law. Maybe if this trend continues, there will be enough to form an influential caucus in Congress. However, as of now, no one is really listening to the extreme left in Congress and we've never had an extremely liberal president during my lifetime.
If you disagree, I'd be happy to have you point out some counter examples from party members with actual power (presidents, governors, state legislature leadership, senators, house leadership, committee chair persons or ranking members), but they all tend to be moderate.
> No, the democratic electoral base is consistently and loudly complaining that after the primaries, most democrat candidates become moderates in the general election
Actually, about the same number of Democrats say their candidates are too liberal as not liberal enough. E.g. for Harris, both numbers hover between 10 and 15 percent.
The not liberal enough cohort is especially loud, particularly online, but the data shows candidates end up about at the primary voter average, as you might expect.
Using local labels to communicate to an (inter)national audience is a bit foolish, I think.
In SF, we have a wealthy clique who are locally labeled as “progressives” and who are also contradictorily against new housing. They even veto’d building a new apartment complex on a parking lot!
I’d personally call that clique “NIMBY” since their “progressive” label is essentially designed for propagating denialism among the credulous.
> In SF, we have a wealthy clique who are locally labeled as “progressives” and who are also contradictorily against new housing.
Right, but a lot of those folks are probably supportive of gay marriage and women's bodily autonomy, which does make them progressive compared to huge swaths of America even if they have regressive politics on housing. I don't know if the national labels would really be any more useful in this case.
The Seattle Times is the relatively conservative paper in Seattle, but it's still "liberal" in the sense that it happily criticizes Trump and isn't calling for a "straight pride" month.
Realistically the local labels probably paint the clearest picture of the dynamics at play. Seattle Times was pretty strongly opposed to Katie Wilson in the run-up to the mayoral election, and I think that still affects their coverage.
> This is almost entirely an artifact of the financial instruments used to pay for these buildings, regardless of any Seattle policy changes.
Why would this be different in Seattle than in other cities? Many downtown office towers are bought or built using a lot of debt throughout the U.S. What do you think makes Seattle special?
> We just saw another building turn over, US Bank Center. The new owner bought it at a price where they'll be able to lease it competitively, and it won't sit empty. We'll see that continue to happen.
The news story mentions the U.S. Bank Center example. What it says that you're leaving out is just HOW big that discount is:
> The new owner of the U.S. Bank Center, having paid just $280 million, or less than half of what the building went for in 2019, presumably can afford to lower rents enough to fill the place, which is now 45% vacant, according to CoStar.
A discount of more than 50% is a bubble bursting. It's great that the new owner can offer fire-sale rent, but where does that leave the old owner, if they were truly as leveraged as you suggest they were likely to be?
> The Seattle Times has always been a conservative rag, and their editorial board hates the new mayor, so they hit the "Seattle is dying" story as often as possible. They've got a long history of this whenever there's leadership they don't like, ask me about it!
OK, I'll ask you about it. This "Seattle Times = Blethen family propaganda" line has been tiring for the 25 years I've been hearing it. What exactly are they not covering about Seattle's downtown today that you think they should be? Why do you think that their opinion staff influence the news coverage so much? In short, if the Seattle Times has a conservative bias in its news coverage, why does the Wall Street Journal famously have a liberal-biased newsroom?
Why is Seattle impacted worse? Because so much of our office space was tech companies that decided they didn't need as much office space and can do their work remotely.
Look up the old owner and you'll realize why it doesn't really matter that they're taking a massive loss, and why I don't really care. I left it out because it's already a long comment and that's not really relevant.
They could have written an article about how foreclosures on office buildings take a long time and that sublet offerings in Seattle are turning over at a healthy rate. And the owner of a company in media absolutely influences that coverage, why do you think everybody's worried about CBS, or for a long time Fox News?
Think it's significant that Zillow's one of the few significant tech companies to maintain full remote working? They don't leave an Amazon-sized hole in downtown, but they had quite a few floors.
They kept at least the main floor in Russell Investment Center. I don’t know if they have all ten+ floors any more. They were trying to sublease around 100K square feet right after the pandemic but I haven’t seen any news since then.
Bellevue has a few advantages over Seattle. Seattle imposes a city level payroll tax that isn't in Bellevue, and there are other tax implications. Seattle's minimum wage is higher. Seattle has a more visible drug/homeless problem.
Seattle can charge a premium for its advantages over Bellevue because they provide additional value, and the premium Seattle charges is actually less than most people make it out to be.
They passed a tax on basically just Amazon in 2018 and there were rumblings of Amazon leaving the city for Bellevue/Redmond. The city council repealed it within a month and things quieted down, but then COVID happened, they passed basically the same tax again, and this time it stuck. Since then, Amazon's been slowly leaving Seattle for the eastside by moving employees as their building leases expire: https://www.seattletimes.com/business/amazon/amazon-no-longe...
Crime. Everyone moves from DT Seattle to the eastside when they start a family. It’s normalized at this point, where if you see a potential threat u just walk across the street and go on with your business.
Hostile business environment. Jumpstart, inflationary wage environment, etc.
Living in DT Seattle is just meh. Expensive and the food scene is terrible due to local labor policies.
Inability to get anything done from the local govt. Wilson spent her campaign promising to make it easier to build housing and just gave in to nimby interests again.
Local politics is lunacy. Constant issues with the the unhoused population but it’s ok let’s just keep pushing it to little Saigon / Chinatown! Close your eyes since it doesn’t happen if you’re in Wallingford, QA, or Ballard!
Fewer and fewer major cos investing into the area.
And then there’s 0 transit enforcement or even any attempt at it. We don’t even have fare gates on the link for gods sake.
It’s just completely absurd how mismanaged this city is, despite how much potential there is.
Nowadays more and more offices opening in Bellevue.
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.
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.
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.
I live near Pike Place Market currently and have for years. There is no open air drug market anywhere nearby. Some people doing drugs, and occasionally dealing to each other, but nothing like what you’re describing.
A few years back when I worked in the Seattle downtown, I used to have a walk around the office during lunchtime. I still remember seeing a drug addict baking what I assume was heroin just a block away from Pike Place Markets. It's crazy
I lived near there for several years. It’s bad but also highly localized. The extreme downtown core is such a small part of the city. Pioneer square, the waterfront, SLU, Seattle center, etc are all very nearly downtown. Area around the new convention center, the paramount, and 5th Ave theatre are totally fine.
>If you haven't lived in Seattle, it's hard to understand the problem.
[...]
>greener pastures (literally) east across the bay
Well obviously you haven't lived in Seattle because if you did you would know the body of water separating Seattle and Bellevue is Lake Washington. Not a bay.
Nice attempt at recovery but your comment still doesn't make sense. You were talking about Seattle, and then suggested Bellevue was "greener pastures." Not that Seattle was "greener pastures" from Bainbridge lol.
Also you just admitted that you don't live in Seattle. So I rest my case.
I mean mid Covid that wasn’t far off. The meth tent vibe in pioneer square was oppressive. You won’t convince me Seattle is a good walking city ever, but I agree it’s much better now and arguably the water front is the best it’s been ever. Still not good though.
I think raw numbers are misleading - they have more Seattle employees, so per capita WARN rate is more interesting. Do you know what the percentage impacts were?
Amazon hq2 is in dc; beezy no longer frequents el gaucho on Thursday nights, instead he is in Miami. They massively pulled back Seattle office and hiring ca 2021-22
I've lived all over the country, both in big and small cities, and most recently in the Seattle area (across the lake in Kirkland) for 4 years.
Seattle has trappings of a city, but socially it doesn't feel like one in the way Chicago and NYC are (ok they're bigger, but hear me out -- it's not the size, it's the people). To me, Seattle feels like Cleveland but with more money.
I couldn't quite put my finger on it, but I would visit different neighborhoods from Capitol Hill to ID to Northgate to Ballard (I liked Ballard the most) almost every weekend, and everything just felt so subdued compared to a city that is truly alive. I had to take trips to Vancouver -- a similar city but more alive -- just to get my dose of city energy. Even Lynnwood WA -- a suburb -- had more energy.
The city itself has too much monoculture -- predominantly tech bros or hipsters or nature people -- but that's not enough diversity to create true energy.
The food scene was uniquely mediocre relative to its wealth and size. It had pockets of good stuff, but overall just very little risk-taking and experimentation in the restaurant industry because of the economics (min wage is $21.30 which is fair to workers but hard for small business owners) and insufficient population density to turn tables at a high rate (the land is fragmented by water and mixed elevation), and high proportion of food-as-fuel population.
Seattle attracts who it attracts because of what it is -- introverted, nature loving, affluent in a countercultural way. But this does not create a vibrant city.
Seattle's social energy resembles that of a paradoxical population who want to live in a city but are secretly suburban people.
As someone that actually lives in Seattle, this is so funny to read. It comes across as someone that pretends to live in Seattle and there sure are a lot of people that love to pretend they live here.
Seattle has far more energy than Austin does for example and it doesn't really take much digging to get involved in the various scenes we have here. The food scene here does suck though, that's universally true.
Totally agree. Going to Vancouver often just highlights this for me, same climate and topology and .. amazing food scene! Shops are open until 10pm! Lots of good walking areas! It can be done!
Also your comment complains about the energy of the city (that it is too suburban feeling) and then you say you like Ballard the most -- which is by far the most suburban of the neighborhoods you mentioned.
No it is not. (lived experience as an ethnic minority). Lynnwood had way better restaurants and cafes that opened late.
Liking Ballard doesn't mean I endorse its energy. Ballard is one of the quietest parts of the city (the Nordic Museum is there), but people were also the chattiest, which is why I liked it. It provided a brief respite from the Seattle Freeze.
Ha, those writers don't live in Seattle full time. They're only visiting.
I think you may be the only person in the world who thinks Lynnwood has better energy than Seattle. Complaining about Seattle being too suburban and then praising its suburbs is too contradictory to take seriously.
We can disagree about Lynnwood (that's my opinion).
But Seattle does have very low social wattage.
p.s. I should clarify about Lynnwood since this is contentious for folks. For me, Lynnwood produced more social collisions that I care about than Seattle does. It had a lot of immigrant businesses, actually good restaurants, bookshops, hobby shops, etc. where people lingered, even though it's true you have to drive everywhere. It doesn't have urbanity, but it produced more lived energy than an actual urban place like Seattle did.
I also used "suburban" in two senses: physically suburban versus socially suburban. Lynnwood is physically suburban. But Seattle felt socially suburban: private, subdued and short on spontaneous public life -- at least to me (as someone who doesn't drink). An actual suburb like Lynnwood felt less socially suburban to me, with its late night cafes and things to do.
Same with Ballard. It's a fairly quiet part of Seattle, but the social collisions there were somehow better than say SLU.
Seattle is generally a fairly high quality city as walkability and bikeability goes. While office vacancies are up, sure, residential vacancies are not. The city is packed with people who enjoy and want to live here. The handful of blocks that makes up the business district aren’t as busy as they used to be, but that’s such a small part of the city.
Also, Amazon did not really “relocate” as much as open more offices in other cities. I know people supporting Amazon ELT and plenty of high level executives are here. They have huge amounts of money, employees, and office space in Seattle, and there’s no sign that’s changing. The areas close to Amazon’s office space are very attractive places to live, demanding high rent, and generally safe, green, and pleasant to exist in. (I lived near there for a few years.) The high rise apartments that have been opening year after year for a decade in these neighborhoods still have strong demand.
Am I selling it positively? Sure. But you’re selling it pretty negatively, in a way that doesn’t match what many people who live here really believe.
Anyways, Seattle has tax problems mostly because there is no income tax. But it is a challenge: to actually make the city safe and vibrant and even more great, we need to invest in public transit, biking, parks, and schools.
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.
While visiting a family member at least a decade ago, I went to a fireworks display in Redmond, and two things really stood out.
First: It doesn't get dark until practically midnight, so the fireworks show started at 10:00, but it was still pretty light.
The second: Most families there had at least one parent with a Windows phone or Surface Tablet, back when they only used ARM processors. I had seen maybe one of each in use before that, and suddenly I was surrounded by them.
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 childhood 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.
I haven't lived in Seattle since 2011. I remember Belltown having one or two blocks that felt a little spotty or like you wanted your guard up, but the rest of it was thoroughly gentrified by the time I left, and it was a common choice to live for new college grads from the suburbs arriving to work in tech. I have to assume the process has continued.
The area around 3rd and Blanchard is sketchy, but in the rest of Belltown the biggest hazards are incompetent Uber/lyft/doordash/etc. drivers and drunk people on lyme scooters.
As someone pointed out in a conversation elsewhere, datacenter water use is a small part of total water use (in WA and CA), which is dominated by agriculture.
Simple, obvious answer to your rhetorical question is: where there's water and power. But city water and city power are not the same as what ag needs / wants / suffers. City water and city power have reliability and purity / quality standards which ag doesn't need (not enough to pay for it).
Do the objectives / needs of datacenters comport with the constraints and drivers which evolved city water / power? How do the constituents who paid for (and probably are still paying for) the buildout feel about the resource _which they own_ being utilized for a purpose which maybe doesn't comport with the _contract_ they thought they were getting?
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.
Just for reference, Peer 1 has a data centre in downtown Vancouver which, fifteen or so years ago, was able to accept my then-employer as a client and offer us a quarter, half, or full rack, but could only offer us enough actual power to run about two servers.
The reason being that they had a huge number of old, grandfathered-in clients with old systems from ten or fifteen years ago which were using massive amounts of power for the work they were doing; newer systems could do the same work for a tenth the power or less, but the customers have no reason to upgrade so they don't.
Getting any more power into the building, I was told, would require having BC Hydro replace the transmission lines coming into the building, which would expand out to a modernization of a lot of the transmission lines in the neighbourhood. For obvious reasons it was cheaper for them to just build a new data centre somewhere else, though they wouldn't say where at the time.
When it comes to the hyperscale data centres that are all the rage these days, it's very likely that downtown Seattle doesn't have the power infrastructure to support very many, if any; couple that with the claim from this random website I've never heard of that hyperscale data centres could be up to 10 million square feet and you'd probably have to bulldoze half of downtown Seattle to build the infrastructure required.
Fwiw there's a 290k sqft DC on Denny a few blocks from the Amazon towers https://h5datacenters.com/seattle-colocation.html
If you live in Seattle you've probably walked right past it. Small potatoes compared to a 10M sqft DC but it hosts real traffic.
at face it seems like it would be "retooling" rather than ground up construction, with foundations for connection infra, it should go up fast, and easy if AMZ already owns it.
>Some commentators have blamed the downtown office apocalypse on Seattle’s taxes, antibusiness rhetoric and perceptions of public safety.
That is very hand-wavy of the author, Seattle literally taxes gross receipts of every business that does over $100,000 [recently raised to $2 million], with no deduction for expenses, and on top of an employer paid payroll expense tax.
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.
I'll only disagree that it's not large swaths. I've never met my coworkers in person and we're doing immensely interesting things, anecdotally. And we're moving so much faster than my last in-person workplace. But my perspective isn't just based on that.
Or maybe "large swaths" is too imprecise to quibble over. Certainly some industries are better in person, but who can say how many? I think my precise point is that I don't think the industries that have gone remote are worse for it and don't need to to back, and many more can afford to go remote.
with all the new taxes the city and the state have piled on, compensation above $1m is going to be taxed (federal + state) at a marginal rate of 56% by 2030, which I believe will be the highest in the country. Not to mention the state is in budgetary deficit, the county is losing population, and the city has extremely business hostile politics. No C-level exec has any economic incentive whatsoever to contract for a large presence there over other places.
Yet rents won't drop -- the commercial mortgage covenants prevent landlords from dropping rental rates, so they'll just sit there fallow until the market recovers.
That's the monumental social question going unconsidered -- why has governmental regulation not somehow adapted to the new economic reality, so that all that real physical capital is put to at least some productive use?
My pet theory is that the best thing any city could do is having a strict vacancy tax in the downtown core, especially on retail space. Nothing makes a place feel dead like seeing boarded up restaurants or shops, and since the pandemic those have been lasting for years because the landlords don’t want to lower rates. There should be some grace period followed by tax rates ramping up so sharply that, say, they’d pay a food truck operator to use a storefront just to have something going on at every place on the block.
One of the things which helped the early web startup scene was that the amount of startup capital was a lot lower when you could get an old loft for an order of magnitude less than top-tier office space. Cheap money for most of the century skewed towards huge companies (or dreams of becoming one) but cities tend to benefit more from many small to medium sized businesses which aren’t trying to become Google.
Seattle has a few confounding factors:
- Higher taxes that are not present in surrounding cities
- A public school system that is hot garbage compared to 20 years ago (Eastside schools are still ok)
- Amazon as of almost a decade has been pushing hiring to their Eastside offices, and trying to freeze headcount in the state overall
- Lots of the engineers you want to hire live on the Eastside
Short term, Bellevue is a better place to have your office. Mid term, the big winners are Texas, Vancouver (CA) and India. A little longer term, the lower end of all those jobs are gonna anyway in a puff of tokens.
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).
NYC's advantage is that older office buildings are more amenable to adaptive reuse.
Modern office buildings have deep floor plates and sealed windows, relying heavily on HVAC and artificial lighting to make the center of the building habitable. Bedrooms require exterior windows, so an optimal floorplan is a ring of bedrooms around the outside which leaves gobs of low value square footage in the middle.
Yes, this is a huge advantage (and one among several reasons why malaise in the commercial real estate market in other US cities doesn’t transfer easily into lessons about NYC’s market).
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!
Odds are they he gets bogged down in the morass of city government and moderates out of lack of willpower and understanding of the levers of city government.
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).
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.
Yeah, when I hear about how the tax changes are going to result in a huge exodus of millionaires it's not backed by data. The data shows millionaires actually move LESS than the general population. Places that instituted high taxes didn't see an exodus. It turns out if you have a great city with great physical and social infrastructure, people want to be there. Seattle is building both. The physical infrastructure is better now then when I moved there 10 years ago. I just took a train to Bellevue from downtown Seattle for a couple bucks. Waterfront looks amazing and beautiful now. City is really clean.
The cross-lake rail is just amazing. I commuted to Bellevue up until my retirement recently and I really liked it the couple of times I took it.
I don't want to pretend Seattle's perfect. It is very difficult to build new housing here thanks to well-meaning regulatory reform; as someone else noted, you used to be able to build fairly small apartments and that's not legal now. It'd also help a ton if the liberal centrist business-oriented cohort and the progressive wing could figure out how to work together without all the finger pointing. But it's an excellent city.
If they can help figure out how to make turning office space into apartments attractive that will solve the vacancy problem and help keep housing costs at bay.
> 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?
A few years ago I was involved in purchasing a commercial building for split purposes. After viewing several spaces it became clear how critical plumbing location were to thinking about how a space could be used. We looked at a few where owners had attempted to change the layout in strange ways. In the end we decided our two goals were not well suited to a single building so we leased a production space and purchased a smaller building for other purposes.
Another issue is that a lot of those office buildings use post tensioned cables in the concrete slabs so making a hole needs to be done very carefully to avoid the cables. Not only do the cables provide a lot of structural support but breaking a cable is like cutting a stretched rubber band except with steel cables and with literally tons of force stretching the cables.
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.
> 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.
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.
Bedrooms are where people spend majority of their time when awake. It is where kids play, do homework, adults work from home, watch youtube, read internet.
Unless we are talking about super large appartment with tons of rooms, they need windows
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.
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.
From a landlord’s point of view, efficiency is about how much rent you can get for it, either directly or by making nearby units more attractive. Hidden away on an upper floor doesn’t seem very attractive as a commercial space?
If they can’t rent the interior for much, that’s going to make replacing it with a new building look better because it’s more efficient.
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.
> 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.
Minimum DSCRs have long been used to monitor the current value of a property, and less income is less income.
> 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.
This makes no sense. Why would a lender not want to keep tabs on their investment? What does shell game (a game where someone is intentionally deceived) even mean here?
Yep, the issue is that recalculating DSCR doesn't happen on the right timescale to incentivize reducing rents, instead incentivizing keeping vacancies open and using a pro forma DSCR.
The banks know this is a structural issue, but are likewise incentivized to keep "strong assets" on their balance sheet, rather than a bunch of troubled assets bound for default.
The claim isn't that they can keep this up forever, it just needs to last another quarter, every quarter.
The shell game is both parties knowing that the cups are all empty but still playing because it's better for them both to do so.
DSCR is calculated at least once per year. I don’t know what pro forma could mean here, it’s purely a cash flow calculation. The money came in, or it didn’t.
> The claim isn't that they can keep this up forever, it just needs to last another quarter, every quarter.
I don’t understand what this means, or what is being “played”, the lenders all have a near real time view into the business. The lack of cash flow can’t be papered over without engaging in fraud, but it’s also up to the lender to decide if they want to take action due to a failing DSCR.
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.
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
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.
"The bigger culprit, though, is the tech sector. Its astonishing decadelong push for office space, and equally astonishing slowdown, left downtown Seattle with a gap between supply and demand that will be very difficult to bridge."
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.
Seattle here, and a real estate nerd.
This is almost entirely an artifact of the financial instruments used to pay for these buildings, regardless of any Seattle policy changes. The Seattle Times has always been a conservative rag, and their editorial board hates the new mayor, so they hit the "Seattle is dying" story as often as possible. They've got a long history of this whenever there's leadership they don't like, ask me about it!
In Bellevue, office vacancies are low because most have long term tenants - even if the spaces aren't full of workers, the companies paying for them can continue to do so.
In Seattle, most office space is leased by smaller companies. We have diversity in availability, which is great, we have tiny office leases available as well as big ones. I believe those smaller spaces also often had shorter leases.
There are some spaces in Seattle where an anchor tenant (Indeed with 11 floors in the 2+U building at 1201 2nd Ave is a good example) shrank the footprint they use, and quickly sublet floors they aren't using. Those sublets can be priced appropriately for the market, and the main tenant keeps paying the original lease price.
However, when a space loses a tenant, the bank can't just drop the price for the owner, the same as you can't just pay less on your mortgage if you get a lower paying job. That has to go through a long, painful process, and usually the building will end up sold before pricing can change.
This is lag. It's easy to correlate it with a choice by Amazon or with new taxes, but there's quite a bit of demand for office space in Seattle, just not at the prices the owners are forced to ask with their financing instruments.
We just saw another building turn over, US Bank Center. The new owner bought it at a price where they'll be able to lease it competitively, and it won't sit empty. We'll see that continue to happen.
What are the financial "instruments" ?
The main claims from the article seem worrysome, IN particular, the 37% vacancy rate, as well as multiple buildings underwater[3], etc.
Now, lets dissect the claims that this is part of some cycle, and not the result of new city hall management. The reality is that with Jumpstart, and with the vacancy rate, enterprises are not renting. But, the owner is stuck with the asset in what is now a hostile jurisdiction. So, even if owner may not be able to change terms on their mortgage, they certainly can charge less for rent. Empty units do not contribute to cash flows to pay the building mortage. I understand there may be consequences to lowering rents, but those consequences are coming home anyway: The building will need to be sold, at a loss, by the bank to a new owner. And as you said, that process takes time. And the jurisdiction seems hellbent to make it harder.
Now, as buildings sell, this in turn lowers the appraised value, which is key to the Seattle tax base.
So, the downtown core is going to produce far less in property taxes in the foreseeable future, with fewer tenants paying (at least in short term) occupancy taxes, etc. This is going to play out in a decade.
According to this, commercial property taxes are about 26 %[1] of the Seattle budget
Let's assume appraisals go down 50% for those impaired offices. This is not crazy, there's precendent for it[2]. That means the Seattle budget must be cut by 13%. This is not even factoring other losses from job loss, sales tax lost, etc. Maybe that's not "Seattle is dying" , but sound pretty bad ?
[1] https://www.seattle.gov/documents/departments/financedepartm...
[2] Seattle/downtown office properties lost ~$10–15+ billion in assessed value since 2020 (46–48% drop) . https://cdn.downtownseattle.org/app/uploads/2026/06/New-Repo...
[3] https://www.king5.com/article/money/business/downtown-seattl...
The financial instruments are commercial real estate loans.
Those loans often do not allow the borrower to charge lower rent.
Property taxes are not calculated that way. The property tax rate for a given year is backed into (a "mill rate") based on approved dollars of spending divided by total property value. If total citywide property value drops by 50%, the property tax rate doubles that year.
So no, the property value changes aren't really an issue.
I'll add a few bits. Commercial leases are typically "triple net" so taxes are passed pretty much directly through to tenants and land lords don't need to worry too much about them. A very visible part of the "dead downtown" effect is due to small businesses that have terrible margins, high fixed costs (including rent), and don't survive losing 20% of their customer base. And finally, anyone paying attention saw that Seattle core downtown is a highly concentrated bet on office rental to the exclusion of almost any other use of space or reason to go there.
A few years back I did an art installation in one of the storefronts at the 2+U building and in the process got to study up on some of the issues and talk to a few people, the general theme was that everyone had a vested interest in focusing on possible causes that were external and fixable within a short time. I don't think that's reality.
>Those loans often do not allow the borrower to charge lower rent.
I have never seen it substantiated that a promissory note in commercial real estate has a clause that dictates how the borrower can price their products or services.
There will be terms for the borrower to be in default if they lose too much revenue or their expenses go up too much, such as leaving spaces empty:
https://www.investopedia.com/terms/d/dscr.asp
Whether a lender wants to foreclose on a borrower in default is far from guaranteed. Often times, they are loathe to take over management of a building so they simply work out a new agreement with the borrower.
No there won't be clauses about rental amounts. It's not that straightforward.
It boils down to collateral for the loan.
A building has a value based on future rents. The owner borrows from the bank based on that value. The building is collateral for the loan.
The rental rate (not occupancy) determines the current building value. (Occupancy affects cash-flow, but not building value.)
Reducing rent improves cash flow, which may help paying the loan, but loan payments here are not important.
What is important is that the collateral covers the loan. Reducing the rent triggers a re-evaluation of the building value, which in turn affects the loan. There's no discretion here, it's just math.
On the other hand, as long as the owner continues to pay the installment on the loan, and as long as the building remains the same value, the banker doesn't have to do anything.
Yes, there are ways the price can be fudged a bit (bundling services, remodeling allowances and so on) but the "list price" of the rent can't come down without (automatically) triggering loan problems.
Since property companies tend to have multiple properties, cash flow is sufficient to pay the loan. So that's a lot better than triggering a revaluation.
In short commercial real estate does not behave like residential real estate.
This is exactly the key - residential real estate is based on tons of pricing effects, and appraisals are much more "feels" than "reals", if you will (how people feel about the area, how they feel about the tower the previous owner added, how they feel about the location, etc).
Commercial real estate valuations are almost entirely a mathematical formula based on rents, current, whether they're collecting them or no. And if the rents drop (e.g., you start renting it at a lower square foot rate) the valuation drops, which can require recollateralization (e.g., unlike your house, the banks require that the loan NEVER be more than 50% LTV or something) so if the value of the property calculation makes it go above that, you have to pay down the loan or add additional property as collateral.
Residential real estate has a lot of sweetheart terms due to government subsidies, especially in the US. That is why you don’t see 30 year fixed rates anywhere else, and 0% down loans anywhere else.
The DSCR equivalent for residential real estate is debt-to-income ratio. In a free market, it is conceivable that lenders offer lower interest rates for borrowers who periodically prove their DTI is sufficient. That is basically what refinancing is, and what people with adjustable rates mortgages have to do.
> residential real estate is based on tons of pricing effects, and appraisals are much more "feels" than "reals",
If you have looked at a residential real estate appraisal, there is a very real process of gathering comps, evaluating the structure, discounting for wear and tear of major maintenance items such as roof, HVAC, etc. If anything, because residential real estate sales volume is so much higher than commercial, residential is more “reals” than “feels”.
> if you will (how people feel about the area, how they feel about the tower the previous owner added, how they feel about the location, etc).
Who are these “people”? Because if we are talking about appraisers, this should disqualify their license to appraise. Appraisers should be mostly looking at competitive sale prices, per sq ft construction costs of major house components, and other objective criteria. Why else would a lender pay them to evaluate a property?
>Commercial real estate valuations are almost entirely a mathematical formula based on rents, current, whether they're collecting them or no
This is not true. Try calling up a lender and asking to borrow money without showing them cash flow, and they will hang up on you.
> And if the rents drop (e.g., you start renting it at a lower square foot rate) the valuation drops, which can require recollateralization (e.g., unlike your house, the banks require that the loan NEVER be more than 50% LTV or something)
They literally do this, via DSCR. If you stop renting space, your operating income goes down, which causes the DSCR to go down, which triggers a default, which means the lender can negotiate new terms, which could involve the borrower putting up more money, extended loan terms, change in interest rate, anything.
The alternative to a loan with a DSCR is usually a 5 year adjustable rate mortgage, which usually has a higher interest rate and then in 5 years, you still have to use your cash flow to qualify for another loan, so eventually someone will want to see income for the property
This is a good guide:
https://www.occ.gov/publications-and-resources/publications/...
On page 21, for underwriting standards:
> Effective CRE lending policies generally reflect the following for each type of loan or property:
>• Minimum standards for borrower or project net worth, support provided by guarantees (if applicable), borrower and guarantor cash flow, and debt-service coverage ratio (DSCR).
Residential real estate appraisals are done by under employed real estate agents. They’ll always find a way to justify the number that you paid, like during Covid when I bid $200k over asking for a $1M house, the appraiser didn’t bat an eye and got to that number. That was totally based on vibes.
I don’t know what “under employed real estate agents” means, but the appraiser that the lender cares about is in no way associated with the real estate agents. The lender picks the appraiser (a licensed professional usually working as an independent contractor) who submits a report to the lender, who then determines whether or not they want to use it.
Asking price also has nothing to do with market value, so offering $200k more over asking would be irrelevant to the appraiser. You should have received a report showing recently sold houses similar to the one you were buying and other physical features that justified the appraisal.
There is even an appraisal contingency in most purchase agreements that outline what to do if an appraisal comes in lower than what a buyer offers to pays. Typically, the buyer can exit the purchase and get their earnest money back, or they can put additional money down to cover the gap between the appraisal and the offer price.
If a house is getting so many bids that it sells for 200K over asking, then that is pretty clearly the market price as determined by auction. Of course the appraisal would sat that is the value because it is.
This sounds like a conspiracy theory. Why would a bank be willing to accept a valuation based on a fictional rent number?
> Reducing the rent triggers a re-evaluation of the building value, which in turn affects the loan. There's no discretion here, it's just math
What is “the” rent? The building has multiple tenants (usually), at various prices. It makes no sense that there is a specific price that the landlord cannot rent at to any one tenant that “triggers” a re-evaluation.
If the lender wants a continuous view into the collateral’s value, which any lender with two brain cells to rub together would, then it would require a minimum DSCR, which they do.
https://www.investopedia.com/terms/d/dscr.asp
>On the other hand, as long as the owner continues to pay the installment on the loan, and as long as the building remains the same value, the banker doesn't have to do anything.
This is not sufficient for most CRE loan covenants.
https://www.cohenandsteers.com/insights/the-commercial-real-...
> And 75% of CMBS office loans have a debt service coverage ratio (DSCR) greater than 1.5x (Exhibit 9). This helps to mitigate the risk of term default (i.e., a default prior to a loan’s maturity) since the net cash flow on the properties sufficiently covers interest payments. Generally, term default risk is more of a concern when the DSCR falls below 1.25x. But only 15.5% of CMBS office loans currently have a DSCR in this range.
> Yes, there are ways the price can be fudged a bit (bundling services, remodeling allowances and so on) but the "list price" of the rent can't come down without (automatically) triggering loan problems.
>Yes, there are ways the price can be fudged a bit (bundling services, remodeling allowances and so on) but the "list price" of the rent can't come down without (automatically) triggering loan problems.
DSCR cannot be fudged this way, without engaging in fraud. That’s the whole point, looking at cash flow for the specific collateral gives the lender insight into how well the collateral is being managed and market conditions.
>Since property companies tend to have multiple properties, cash flow is sufficient to pay the loan. So that's a lot better than triggering a revaluation.
Nothing I am reading indicates this is the case. The idea that lenders would want to pretend a business is fine just because they stop selling rather than sells at a lower price than at some point in the past is not passing the smell test. If lay people on the internet can figure out the folly in this concept, then surely the people betting millions and billions can.
The discourse about commercial real estate in downtowns (well-beyond this thread) has taken on a kind of “one neat trick” wishful thinking.
If only the greedy owners or banks would recognize their massive investments had lost hundreds of billions in value due to declining demand, then… the underlying causes of that decline in demand and the consequences if it persists can be waved away?
Aren't same instruments being used in Bellevue as well?
"No lowering rent" rules are making downturn worse, but the trigger is something else.
I tried to cover this in my original comment - Bellevue hasn't lost as many tenants because they're usually larger and have longer leases. They may yet have an increase in vacancy rate.
>>> Property taxes are not calculated that way. The property tax rate for a given year is backed into (a "mill rate") based on approved dollars of spending divided by total property value. If total citywide property value drops by 50%, the property tax rate doubles that year.
When the LLCs that own the commercial buildings declare themselves bankrupt, and walk away from the asset and throw the keys on the table, who pays the 50% increase ? The banks?
Will banks own a 50% increase in property taxes ?
What about residents ? Renters ?
I think you're starting from two flawed assumptions.
1. Most of our largest buildings are owned by large companies. For instance, Gaw Capital owns Columbia Center. Blackstone owned US Bank Center, until it was bought by Spear Street Capital.
2. You could delete downtown and citywide property value wouldn't drop by 50%. Nothing's moving that fast, I'm just using simple math to explain mill rate.
>...If total citywide property value drops by 50%, the property tax rate doubles that year.
This claim is simply not true. Even in a budget based system like Seattle, there are hard statutory limits on how much the tax could increase.
If total citywide property value drops by 50%, the tax rate would hit its legal maximum ceiling, and the city would have to make up the money somewhere else or cut spending.
The only statute I'm aware of is a limit on revenue increasing more than 1% a year. Not a limit on percentage. Can you point me to this statute?
One big limitation is RCW 84.52.050 (Limitation of levies) which I think implements the 1% constitutional max allowed levy. I read somewhere that Seattle is at a levy of about 9.4, so that would be a hard limit right there.
That's a limit on total revenue, not percentage.
The 1% limit is a limit on the level of the property tax. If property tax values somehow fell by 50%, in theory, the property tax rate would double to ensure city operations remain funded. However, Seattle is almost at the statutory limit right now so there isn't much room to increase the rate - I this scenario the city would hit the 1% limit and be forced to get the money somewhere else or cut its budget instead. As I initially wrote:
>...If total citywide property value drops by 50%, the tax rate would hit its legal maximum ceiling, and the city would have to make up the money somewhere else or cut spending.
And the city wouldn't even get all of the increase it is allowed as there are other tax districts who would also want a higher rate. The tax increase that would be allowed would be prorated with the other tax districts.
(The 1% revenue growth cap you referred to earlier is a different statute and a different issue.)
> So, the downtown core is going to produce far less in property taxes in the foreseeable future, with fewer tenants paying (at least in short term) occupancy taxes, etc. This is going to play out in a decade.
> According to this, commercial property taxes are about 26 %[1] of the Seattle budget
In WA state, the property tax collected isn't related to the total of the assessed value. The total tax billed across all existing properties typically goes up 1% per year (the "levy lid"), unless voters have allowed a "levy lid lift". That total is apportioned amongst the properties by value.
So if everybody's property values drop in half, their property tax rate doubles (plus a little) and their tax bill stays about the same.
Of course, if commercial property assessments drop and residential assessments stay the same or go up, commercial bills will drop and residential bills will go up. But the total tax bill will still be 1% more than last year.
An increase in vacancies across the board is reduction in demand, plain and simple.
That the new equilibrium price to re-tenant all the buildings is lower is evidence of that.
But the OP is correct that when enough of the building owners default on their debt, the building will be foreclosed, sold for less and asking rents will go down towards the new equilibrium price.
Thus occupancy is likely to improve again down the line.
But, yes, this is not a bullish situation for Seattle. Office generally hasn't been doing well nationally, so it's more of a question of relative performance.
Honestly, I think is a bullish situation for Seattle.
With vacancy this high we're likely a more attractive place to start a small company, as recollateralization and foreclosure put square footage on the market at competitive prices.
For those who compare to Bellevue - in 2025 we grew population at 0.8% to Bellevue's 0.2%. You'd never know that from the vacancy reporting.
Drop in rents is drop in demand, plain and simple.
Fewer businesses want to invest and move into Seattle at the price it used to cost.
It's true that if occupancy is poor, then a recovery in occupancy will bring more activity.
It's bullish in the same way that cheaper housing due to increased crime and decline in quality of life draws in new residents.
Again, office is doing poorly nationally, but it does seem particularly worse in Seattle than other hubs.
If I'm not mistaken, Seattle has the worst office vacancy in the country by a decent margin, aka the most demand destruction.
If you look back at my original comment, you'll note I mentioned that sublets at appropriate pricing are filling quickly. Occupancy isn't appropriate for current demand. Occupancy is depressed by owners avoiding recollateralization.
And you have to wonder, what kind of boom in innovation could lots of reasonably priced office space support? What gov policy cold push landlords and banks to accept reality? Vacancy tax? Change to bank regulations?
The timeframe of regulatory changes here is not worth any investment. The turnover will continue to happen, it's too complicated to try to change, and you'd probably create nasty unexpected side effects.
Some could be fairly simple. Require banks to re-calculate collateral values after 6mo of vacancy, with a large requirement to reduce.
Can you think of two potential downstream effects that could have that you wouldn't want?
Make usury illegal again?
(I mean the classical definition not the watered down modern one)
I'm not sure the bank has that much to do with it.
Commercial real estate valuation is based entirely on its ability to produce income. Lower the rent, lower the value. And that's a problem because most commercial leases are long (5-20+ years) so you're locking in an asset writedown for a long period of time. So it can be better to leave it vacant and pretend the value hasn't changed.
You can still run into problems with this (eg servicing the loan). So I don't think it's quite the issue that banks have to approve lowering the rent so much as the owner might lower their asset value and have problems with the LTV and DSCR so the bank may then require you to refinance or add capital.
By the way, we've gone through this before. Up until the 1990s, law firms were by far the largest tenants of office space because they had very large law libraries. Then that went online and they downsized. This was an acpolaypse in the 2000s combined with the dot-com bust.
I think the lag you're talking about is on banks essentially foreclosing on a building and selling it off, allowing the new owners to charge less because they paid less.
Yes, that's exactly the lag I'm talking about. The banks won't allow the buildings to lease for less than they need to make per sqft to pay back their loans. They'd rather foreclose, apparently. There's some reporting around this recently, I'm not in a position to look it up today but it should be easy to find!
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> However, when a space loses a tenant, the bank can't just drop the price for the owner, the same as you can't just pay less on your mortgage if you get a lower paying job.
You can always pay less on your mortgage or any other debts if you are in a crisis and negotiate with the lenders. They prefer this immensely over not receiving anything at all. And in the long run they also receive more interest this way.
It's very common especially for businesses to enter these kind of negotiations with the banks, and not very uncommon for individuals either.
So it makes much better sense for everybody involved to sublet these spaces for market value, even if that income doesn't cover the original mortgage, because something is better than nothing. Somewhere there's a giant perverse incentive in situations like this.
Your argument is that it's simply because of dropping prices. Maybe that does explain the bulk of it. But the article seems to suggest it's the WFH transition. How much of the vacancy rate would be explained by that?
Is there any reason to think WFH rates would differ between Seattle and Bellevue?
I’m not super knowledgeable in this area but GP is right the The Seattle Times is a very partisan outlet that spins confirmation bias into everything. Left-leaning politicians elected? The rain is their fault. Centrists (because this is Seattle)? They’re doing the best they can, maybe give more money to Amazon?
I can tell you specifically that Indeed dropped its footprint because of WFH. They moved into that building during covid, then shortly after introduced permanent work from home / hybrid.
The other person’s point about rents probably explains the continued emptiness but WFH definitely drove the abandonment. And that newspaper does suck.
"Explained by" is complicated - 100,000 square feet of empty space that is leased to a company and unused is not vacant.
This tracks with what I’ve heard around as well. What changed in the financial instruments?
My understanding is a lot of the loans have gone PIK or otherwise essentially aren’t serviceable at current prices. Do you think that’s resolvable somehow or just lagging implosion?
Nothing changed in financial instruments - we just don't usually have a lot of office tenants decide to walk away like we have with the advent of remote work. The loans will work themselves out. We've seen a couple of buildings trade for way less than pre-Covid numbers, and we'll see more.
In another 10 years downtown Seattle will be aligned with the rest of the market again.
Is there any more to this story than "extend and pretend" that's been going on for 6 years?
CRE also includes warehouses, multifamily apartments, retail, hotels, data centers, medical.
I think we kind of lucked out that we had the start of boom in 2023 instead of a recession.
The diversification has allowed the office space price to correct without a contagion.
As a general rule, any snappy memorable line like "extend and pretend" is almost always wrong and a distortion after awhile. The idea sticks around longer than it should because it is memorable, not because it has anything to do with reality.
Tell me more? As commercial leases are ending the owners are finally having to accept foreclosure or sell.
Cities don't die they just go into hibernation for a few decades only to wake up and grow stronger.
The whole office real estate thing operates on a boom bust cycle.
> The Seattle Times has always been a conservative rag
The Seattle Times is Left-Center with a high credibility rating. [1]
Such a deliberate distortion of the facts renders the rest of your screed null and void.
[1] https://mediabiasfactcheck.com/seattle-times/
Just goes to show how loony politics are in Seattle for ST to seem conservative to people.
It's very conservative - just along certain axes that are especially locally relevant. For instance, they've opposed both our 2008 and 2016 mass transit ballot measures (both of which passed with strong support). They were supportive, until we replaced the primary owner's express onramp on Interstate 90 with a train.
Seattle Times is left leaning. Just because your pet measure of transit was opposed doesn’t make it otherwise. Calling it conservative is simply unmoored from reality. It’s also a display of what Seattle politics are like and why it has declined so much on so many facets in a short 20 years. The rampant progressive extremism is the root cause of the issues affecting Seattle. There is no balance or practical governance.
Fallacy of composition.
They're looking at national politics, and on that score, yes, the ST is liberal. When it comes to local politics the Seattle Times is conservative. Your objection is a bit like people who object that the Democrats are conservatives, from a European perspective, except this is about the city itself. The current mayor is liberal, the previous mayor was conservative. They're both Democrats and would be defined as liberals by your factcheck, but that's a different rubric than the one we're talking about.
As a European, Democrats are absolutely not conservative from a European perspective. There are multiple dimensions but at least socially they push everything further to the left than in Europe. (Which is also in my opinion why they are losing elections)
Almost every social topic is pushed to the extreme left by the Democrats. Simply look at how many weeks abortion is allowed in blue state and compare with most European countries. Most European countries are way more conservative.
Economically yes, they are more conservative but even that is now changing as well (see: New York and AOC).
and migrants? I think liberal parties in European countries seem to be much more supportive of refugees than Democrats, current Republican rhetoric aside. also, police, and guns. meanwhile, even with the issue you singled out, most red states in the US have enacted near-total abortion bans. do any countries in Europe ban abortion outright? are the conservative parties pushing for it?
Is this accounting for the fact that European countries with strict abortion laws don't really enforce them any more?
How do Democrats’ policies on health care, paid leave from work, unions, public funding of political campaigns, and public transit compare to European conservatives?
If you’re a single-issue abortion voter, yes the US democrats tend to propose fetal viability (22 weeks or so) as the limit, while most of Europe is 12 weeks. UK and Netherlands are 24.
But if you genuinely believe US democrats are wildly liberal, you must be that rare European Fox News watcher.
> If you’re a single-issue abortion voter, yes the US democrats tend to propose fetal viability (22 weeks or so) as the limit
No, the standard Democrat policy is to allow abortion on demand at any point prior to birth—40 weeks or so.
It’s fortunate we’re on HN to easily identify this comment as sarcasm, but can you imagine being so ignorant as to believe this? What kind of brainwashing is required to think one could get an “abortion on demand” up to birth?
Truly such a belief could only come from the lowest IQ amongst humanity.
That's the law in Colorado, DC, Maryland, Minnesota, New Jersey, New Mexico, Oregon, and Vermont, all of which are blue states.
Prove it
Democrats opposed the Partial-Birth Abortion Act of 2003, and multiple blue states allow abortion at any point prior to birth.
This is false. Not sure if propaganda or ignorance of infowar, or lying for the fun of it, but 100% false.
I think you have a particularly poor read on American politics.
>they push everything further to the left than in Europe. (Which is also in my opinion why they are losing elections)
No, the democratic electoral base is consistently and loudly complaining that after the primaries, most democrat candidates become moderates in the general election (even actively courting Republicans) and do not follow through on the primary election promises when elected. This has resulted in major democratic voter apathy and low turnout.
>Simply look at how many weeks abortion is allowed in blue state and compare with most European countries.
This is true, but you have to contextualize it to America, where people have poor or no sex ed, no access to socialized medicine, no time off from work for medical appointments, likely no public transport to the appointments, and very possibly now needing to travel out of state.
>Economically yes, they are more conservative but even that is now changing as well (see: New York and AOC).
That's very much TBD. First, NYC is not very representative of America as a whole. Second, while there has been a small wave of recent democratic socialist victories that has been well covered in the news, it is too soon to say that's a long term trend or just a Trump induced aberration. Mandani is making a splash currently, but he's just a mayor. I like AOC's politics, but she's too much of an outsider to have any real influence in Congress. She probably has more influence on social media than she does in Congress. I'm not aware of any legislation introduced by her actually becoming law. Maybe if this trend continues, there will be enough to form an influential caucus in Congress. However, as of now, no one is really listening to the extreme left in Congress and we've never had an extremely liberal president during my lifetime.
If you disagree, I'd be happy to have you point out some counter examples from party members with actual power (presidents, governors, state legislature leadership, senators, house leadership, committee chair persons or ranking members), but they all tend to be moderate.
> No, the democratic electoral base is consistently and loudly complaining that after the primaries, most democrat candidates become moderates in the general election
Actually, about the same number of Democrats say their candidates are too liberal as not liberal enough. E.g. for Harris, both numbers hover between 10 and 15 percent.
The not liberal enough cohort is especially loud, particularly online, but the data shows candidates end up about at the primary voter average, as you might expect.
Using local labels to communicate to an (inter)national audience is a bit foolish, I think.
In SF, we have a wealthy clique who are locally labeled as “progressives” and who are also contradictorily against new housing. They even veto’d building a new apartment complex on a parking lot!
I’d personally call that clique “NIMBY” since their “progressive” label is essentially designed for propagating denialism among the credulous.
> In SF, we have a wealthy clique who are locally labeled as “progressives” and who are also contradictorily against new housing.
Right, but a lot of those folks are probably supportive of gay marriage and women's bodily autonomy, which does make them progressive compared to huge swaths of America even if they have regressive politics on housing. I don't know if the national labels would really be any more useful in this case.
The Seattle Times is the relatively conservative paper in Seattle, but it's still "liberal" in the sense that it happily criticizes Trump and isn't calling for a "straight pride" month.
Realistically the local labels probably paint the clearest picture of the dynamics at play. Seattle Times was pretty strongly opposed to Katie Wilson in the run-up to the mayoral election, and I think that still affects their coverage.
If you just focus on capitalism, the apparent paradoxes dissolve.
The wealthy clique in SF aren't really left-wing.
Neither is the Seattle Times.
If you are bad enough at building coalitions you can lose almost any election regardless of how evil or corrupt the opposition, is too : )
"FRANCIS: Whatever happened to the Popular Front, Reg?
REG: He's over there.
P.F.J.: Splitter!"
Using (inter)national labels when discussing local politics is incoherent.
In Seattle you’re considered conservative if you’re not a Marxist.
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> This is almost entirely an artifact of the financial instruments used to pay for these buildings, regardless of any Seattle policy changes.
Why would this be different in Seattle than in other cities? Many downtown office towers are bought or built using a lot of debt throughout the U.S. What do you think makes Seattle special?
> We just saw another building turn over, US Bank Center. The new owner bought it at a price where they'll be able to lease it competitively, and it won't sit empty. We'll see that continue to happen.
The news story mentions the U.S. Bank Center example. What it says that you're leaving out is just HOW big that discount is:
> The new owner of the U.S. Bank Center, having paid just $280 million, or less than half of what the building went for in 2019, presumably can afford to lower rents enough to fill the place, which is now 45% vacant, according to CoStar.
A discount of more than 50% is a bubble bursting. It's great that the new owner can offer fire-sale rent, but where does that leave the old owner, if they were truly as leveraged as you suggest they were likely to be?
> The Seattle Times has always been a conservative rag, and their editorial board hates the new mayor, so they hit the "Seattle is dying" story as often as possible. They've got a long history of this whenever there's leadership they don't like, ask me about it!
OK, I'll ask you about it. This "Seattle Times = Blethen family propaganda" line has been tiring for the 25 years I've been hearing it. What exactly are they not covering about Seattle's downtown today that you think they should be? Why do you think that their opinion staff influence the news coverage so much? In short, if the Seattle Times has a conservative bias in its news coverage, why does the Wall Street Journal famously have a liberal-biased newsroom?
Why is Seattle impacted worse? Because so much of our office space was tech companies that decided they didn't need as much office space and can do their work remotely.
Look up the old owner and you'll realize why it doesn't really matter that they're taking a massive loss, and why I don't really care. I left it out because it's already a long comment and that's not really relevant.
They could have written an article about how foreclosures on office buildings take a long time and that sublet offerings in Seattle are turning over at a healthy rate. And the owner of a company in media absolutely influences that coverage, why do you think everybody's worried about CBS, or for a long time Fox News?
Think it's significant that Zillow's one of the few significant tech companies to maintain full remote working? They don't leave an Amazon-sized hole in downtown, but they had quite a few floors.
I don't think they closed their office - have they reduced their actual leased footprint?
They kept at least the main floor in Russell Investment Center. I don’t know if they have all ten+ floors any more. They were trying to sublease around 100K square feet right after the pandemic but I haven’t seen any news since then.
Yeah, if they're subletting they probably can't get out of the space. I bet they were successful.
>why does the Wall Street Journal famously have a liberal-biased newsroom?
Is this serious? I can't tell anymore.
I'll bite, how's Seattle doing that?
Bellevue has a few advantages over Seattle. Seattle imposes a city level payroll tax that isn't in Bellevue, and there are other tax implications. Seattle's minimum wage is higher. Seattle has a more visible drug/homeless problem.
Seattle can charge a premium for its advantages over Bellevue because they provide additional value, and the premium Seattle charges is actually less than most people make it out to be.
They passed a tax on basically just Amazon in 2018 and there were rumblings of Amazon leaving the city for Bellevue/Redmond. The city council repealed it within a month and things quieted down, but then COVID happened, they passed basically the same tax again, and this time it stuck. Since then, Amazon's been slowly leaving Seattle for the eastside by moving employees as their building leases expire: https://www.seattletimes.com/business/amazon/amazon-no-longe...
Crime. Everyone moves from DT Seattle to the eastside when they start a family. It’s normalized at this point, where if you see a potential threat u just walk across the street and go on with your business.
Hostile business environment. Jumpstart, inflationary wage environment, etc.
Living in DT Seattle is just meh. Expensive and the food scene is terrible due to local labor policies.
Inability to get anything done from the local govt. Wilson spent her campaign promising to make it easier to build housing and just gave in to nimby interests again.
Local politics is lunacy. Constant issues with the the unhoused population but it’s ok let’s just keep pushing it to little Saigon / Chinatown! Close your eyes since it doesn’t happen if you’re in Wallingford, QA, or Ballard!
Fewer and fewer major cos investing into the area.
And then there’s 0 transit enforcement or even any attempt at it. We don’t even have fare gates on the link for gods sake.
It’s just completely absurd how mismanaged this city is, despite how much potential there is.
Nowadays more and more offices opening in Bellevue.
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.
> And the number of people in tent encampments has dropped dramatically, it's become rare and short lived in most of the city.
Do you have any data to support this claim?
Lots. https://harrell.seattle.gov/2024/12/03/one-seattle-homelessn...
From over 700 tents in 22 to under 200 by the end of 24.
Removals, regardless of how you feel about whether this is good policy, are continuing unabated when reported: https://www.kuow.org/stories/is-seattle-sweeping-more-homele...
And what has happened since 2024? https://kcrha.org/news-2026-point-in-time-pit-count-initial-...
The last link in my comment above is about 2026.
What you've linked to is a very different measurement than tent encampments, so it's hard to compare them. Tents are still way down.
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.
One of my regrets is not joining my area's design review board when it had an opening just so I could rubber stamp everything yes.
Oooh I would have appreciated you! Maybe you can do that where you live now!
The NE Seattle one has an opening a few years back that I should've tried applying for.
Thankfully the design review process has been neutered now and hopefully it doesn't get brought back!
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.
I live near Pike Place Market currently and have for years. There is no open air drug market anywhere nearby. Some people doing drugs, and occasionally dealing to each other, but nothing like what you’re describing.
A few years back when I worked in the Seattle downtown, I used to have a walk around the office during lunchtime. I still remember seeing a drug addict baking what I assume was heroin just a block away from Pike Place Markets. It's crazy
I lived near there for several years. It’s bad but also highly localized. The extreme downtown core is such a small part of the city. Pioneer square, the waterfront, SLU, Seattle center, etc are all very nearly downtown. Area around the new convention center, the paramount, and 5th Ave theatre are totally fine.
>If you haven't lived in Seattle, it's hard to understand the problem.
[...]
>greener pastures (literally) east across the bay
Well obviously you haven't lived in Seattle because if you did you would know the body of water separating Seattle and Bellevue is Lake Washington. Not a bay.
I live west across the Salish sea on sunny bainbridge island, natch.
Nice attempt at recovery but your comment still doesn't make sense. You were talking about Seattle, and then suggested Bellevue was "greener pastures." Not that Seattle was "greener pastures" from Bainbridge lol.
Also you just admitted that you don't live in Seattle. So I rest my case.
It always plays out like this.
"Downtown seattle is a war zone, if you don't live there you can't understand!"
Then it turns out they live in Enumclaw.
It’s all love and horses in Enumclaw.
The world's most tired comment.
It takes a lot of energy to love a horse.
I mean mid Covid that wasn’t far off. The meth tent vibe in pioneer square was oppressive. You won’t convince me Seattle is a good walking city ever, but I agree it’s much better now and arguably the water front is the best it’s been ever. Still not good though.
But couldn’t they have lived in Seattle before moving? I don’t follow your logic.
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.
If you pay attention to the WARN layoffs notices you'd also see they fired at a much higher rate in Seattle compared to Bellevue.
So faster hiring east side. Faster firing west side.
It's a soft relocation
I think raw numbers are misleading - they have more Seattle employees, so per capita WARN rate is more interesting. Do you know what the percentage impacts were?
Amazon hq2 is in dc; beezy no longer frequents el gaucho on Thursday nights, instead he is in Miami. They massively pulled back Seattle office and hiring ca 2021-22
I've lived all over the country, both in big and small cities, and most recently in the Seattle area (across the lake in Kirkland) for 4 years.
Seattle has trappings of a city, but socially it doesn't feel like one in the way Chicago and NYC are (ok they're bigger, but hear me out -- it's not the size, it's the people). To me, Seattle feels like Cleveland but with more money.
I couldn't quite put my finger on it, but I would visit different neighborhoods from Capitol Hill to ID to Northgate to Ballard (I liked Ballard the most) almost every weekend, and everything just felt so subdued compared to a city that is truly alive. I had to take trips to Vancouver -- a similar city but more alive -- just to get my dose of city energy. Even Lynnwood WA -- a suburb -- had more energy.
The city itself has too much monoculture -- predominantly tech bros or hipsters or nature people -- but that's not enough diversity to create true energy.
The food scene was uniquely mediocre relative to its wealth and size. It had pockets of good stuff, but overall just very little risk-taking and experimentation in the restaurant industry because of the economics (min wage is $21.30 which is fair to workers but hard for small business owners) and insufficient population density to turn tables at a high rate (the land is fragmented by water and mixed elevation), and high proportion of food-as-fuel population.
Seattle attracts who it attracts because of what it is -- introverted, nature loving, affluent in a countercultural way. But this does not create a vibrant city.
Seattle's social energy resembles that of a paradoxical population who want to live in a city but are secretly suburban people.
> Lynnwood WA -- a suburb -- had more energy.
As someone that actually lives in Seattle, this is so funny to read. It comes across as someone that pretends to live in Seattle and there sure are a lot of people that love to pretend they live here.
Seattle has far more energy than Austin does for example and it doesn't really take much digging to get involved in the various scenes we have here. The food scene here does suck though, that's universally true.
the food is a lot better now than it was a decade ago, but its expensive.
ive only spent a few days in austin, but id say it does have more energy than seattle does?
or rather, its younger and theres more people doing college student stuff like spending all day on a paddle board
Totally agree. Going to Vancouver often just highlights this for me, same climate and topology and .. amazing food scene! Shops are open until 10pm! Lots of good walking areas! It can be done!
>Even Lynnwood WA -- a suburb -- had more energy.
I'm sorry but this is so beyond the pale.
Also your comment complains about the energy of the city (that it is too suburban feeling) and then you say you like Ballard the most -- which is by far the most suburban of the neighborhoods you mentioned.
Finally we've been hosting the world cup and news writers from around the world have been exclaiming that Seattle has absolutely peak energy and culture as a host. E.g. https://www.irishtimes.com/sport/soccer/2026/06/22/keith-dug...
No it is not. (lived experience as an ethnic minority). Lynnwood had way better restaurants and cafes that opened late.
Liking Ballard doesn't mean I endorse its energy. Ballard is one of the quietest parts of the city (the Nordic Museum is there), but people were also the chattiest, which is why I liked it. It provided a brief respite from the Seattle Freeze.
Ha, those writers don't live in Seattle full time. They're only visiting.
I think you may be the only person in the world who thinks Lynnwood has better energy than Seattle. Complaining about Seattle being too suburban and then praising its suburbs is too contradictory to take seriously.
We can disagree about Lynnwood (that's my opinion).
But Seattle does have very low social wattage.
p.s. I should clarify about Lynnwood since this is contentious for folks. For me, Lynnwood produced more social collisions that I care about than Seattle does. It had a lot of immigrant businesses, actually good restaurants, bookshops, hobby shops, etc. where people lingered, even though it's true you have to drive everywhere. It doesn't have urbanity, but it produced more lived energy than an actual urban place like Seattle did.
I also used "suburban" in two senses: physically suburban versus socially suburban. Lynnwood is physically suburban. But Seattle felt socially suburban: private, subdued and short on spontaneous public life -- at least to me (as someone who doesn't drink). An actual suburb like Lynnwood felt less socially suburban to me, with its late night cafes and things to do.
Same with Ballard. It's a fairly quiet part of Seattle, but the social collisions there were somehow better than say SLU.
Lynnwood is where the fun parts of Seattle moved when rents got too high.
Seattle is generally a fairly high quality city as walkability and bikeability goes. While office vacancies are up, sure, residential vacancies are not. The city is packed with people who enjoy and want to live here. The handful of blocks that makes up the business district aren’t as busy as they used to be, but that’s such a small part of the city.
Also, Amazon did not really “relocate” as much as open more offices in other cities. I know people supporting Amazon ELT and plenty of high level executives are here. They have huge amounts of money, employees, and office space in Seattle, and there’s no sign that’s changing. The areas close to Amazon’s office space are very attractive places to live, demanding high rent, and generally safe, green, and pleasant to exist in. (I lived near there for a few years.) The high rise apartments that have been opening year after year for a decade in these neighborhoods still have strong demand.
Am I selling it positively? Sure. But you’re selling it pretty negatively, in a way that doesn’t match what many people who live here really believe.
Anyways, Seattle has tax problems mostly because there is no income tax. But it is a challenge: to actually make the city safe and vibrant and even more great, we need to invest in public transit, biking, parks, and schools.
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.
While visiting a family member at least a decade ago, I went to a fireworks display in Redmond, and two things really stood out.
First: It doesn't get dark until practically midnight, so the fireworks show started at 10:00, but it was still pretty light.
The second: Most families there had at least one parent with a Windows phone or Surface Tablet, back when they only used ARM processors. I had seen maybe one of each in use before that, and suddenly I was surrounded by them.
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 childhood 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.
I haven't lived in Seattle since 2011. I remember Belltown having one or two blocks that felt a little spotty or like you wanted your guard up, but the rest of it was thoroughly gentrified by the time I left, and it was a common choice to live for new college grads from the suburbs arriving to work in tech. I have to assume the process has continued.
The area around 3rd and Blanchard is sketchy, but in the rest of Belltown the biggest hazards are incompetent Uber/lyft/doordash/etc. drivers and drunk people on lyme scooters.
Yep, it's even fancier now. The main spot where it seems sketchy is directly across the street from the Downtown Emergency Service Center.
Streetwise is a great documentary about the mid 80s in Seattle
https://youtu.be/Lu10UUtgxoM?is=t4Q7o4FyI6HlydhL
They were (maybe still are?) around 20% of sq feet overall and a lot of that was leases in buildings far from SLU with no obvious Amazon branding.
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.
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?
owned by amazon ..
now where should data centers be constructed, rather than arable farmland?
As someone pointed out in a conversation elsewhere, datacenter water use is a small part of total water use (in WA and CA), which is dominated by agriculture.
Simple, obvious answer to your rhetorical question is: where there's water and power. But city water and city power are not the same as what ag needs / wants / suffers. City water and city power have reliability and purity / quality standards which ag doesn't need (not enough to pay for it).
Do the objectives / needs of datacenters comport with the constraints and drivers which evolved city water / power? How do the constituents who paid for (and probably are still paying for) the buildout feel about the resource _which they own_ being utilized for a purpose which maybe doesn't comport with the _contract_ they thought they were getting?
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.
Just for reference, Peer 1 has a data centre in downtown Vancouver which, fifteen or so years ago, was able to accept my then-employer as a client and offer us a quarter, half, or full rack, but could only offer us enough actual power to run about two servers.
The reason being that they had a huge number of old, grandfathered-in clients with old systems from ten or fifteen years ago which were using massive amounts of power for the work they were doing; newer systems could do the same work for a tenth the power or less, but the customers have no reason to upgrade so they don't.
Getting any more power into the building, I was told, would require having BC Hydro replace the transmission lines coming into the building, which would expand out to a modernization of a lot of the transmission lines in the neighbourhood. For obvious reasons it was cheaper for them to just build a new data centre somewhere else, though they wouldn't say where at the time.
When it comes to the hyperscale data centres that are all the rage these days, it's very likely that downtown Seattle doesn't have the power infrastructure to support very many, if any; couple that with the claim from this random website I've never heard of that hyperscale data centres could be up to 10 million square feet and you'd probably have to bulldoze half of downtown Seattle to build the infrastructure required.
https://programs.com/resources/data-center-statistics/
Fwiw there's a 290k sqft DC on Denny a few blocks from the Amazon towers https://h5datacenters.com/seattle-colocation.html If you live in Seattle you've probably walked right past it. Small potatoes compared to a 10M sqft DC but it hosts real traffic.
Your 3rd paragraph: I wondered if something like that might be the issue, hence my somewhat tentative musing.
Legacy of all kinds seems always to be so expensive to deal with.
at face it seems like it would be "retooling" rather than ground up construction, with foundations for connection infra, it should go up fast, and easy if AMZ already owns it.
How about arid land? We have a lot of that in the Pacific Southwest.
Build where there is water people complain. Build where there is no water people complain.
There's a surprising amount of farming in arid regions Maybe we should replace those farms with data centers, to reduce water consumption.
>Some commentators have blamed the downtown office apocalypse on Seattle’s taxes, antibusiness rhetoric and perceptions of public safety.
That is very hand-wavy of the author, Seattle literally taxes gross receipts of every business that does over $100,000 [recently raised to $2 million], with no deduction for expenses, and on top of an employer paid payroll expense tax.
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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.
I'll only disagree that it's not large swaths. I've never met my coworkers in person and we're doing immensely interesting things, anecdotally. And we're moving so much faster than my last in-person workplace. But my perspective isn't just based on that.
Or maybe "large swaths" is too imprecise to quibble over. Certainly some industries are better in person, but who can say how many? I think my precise point is that I don't think the industries that have gone remote are worse for it and don't need to to back, and many more can afford to go remote.
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with all the new taxes the city and the state have piled on, compensation above $1m is going to be taxed (federal + state) at a marginal rate of 56% by 2030, which I believe will be the highest in the country. Not to mention the state is in budgetary deficit, the county is losing population, and the city has extremely business hostile politics. No C-level exec has any economic incentive whatsoever to contract for a large presence there over other places.
Yet rents won't drop -- the commercial mortgage covenants prevent landlords from dropping rental rates, so they'll just sit there fallow until the market recovers.
Or until more rational covenants exist. Markets are largely rational economically.
That's the monumental social question going unconsidered -- why has governmental regulation not somehow adapted to the new economic reality, so that all that real physical capital is put to at least some productive use?
Or government pushes them to change. Regulators have tremendous power over banks.
My pet theory is that the best thing any city could do is having a strict vacancy tax in the downtown core, especially on retail space. Nothing makes a place feel dead like seeing boarded up restaurants or shops, and since the pandemic those have been lasting for years because the landlords don’t want to lower rates. There should be some grace period followed by tax rates ramping up so sharply that, say, they’d pay a food truck operator to use a storefront just to have something going on at every place on the block.
One of the things which helped the early web startup scene was that the amount of startup capital was a lot lower when you could get an old loft for an order of magnitude less than top-tier office space. Cheap money for most of the century skewed towards huge companies (or dreams of becoming one) but cities tend to benefit more from many small to medium sized businesses which aren’t trying to become Google.
Seattle has a few confounding factors: - Higher taxes that are not present in surrounding cities - A public school system that is hot garbage compared to 20 years ago (Eastside schools are still ok) - Amazon as of almost a decade has been pushing hiring to their Eastside offices, and trying to freeze headcount in the state overall - Lots of the engineers you want to hire live on the Eastside
Short term, Bellevue is a better place to have your office. Mid term, the big winners are Texas, Vancouver (CA) and India. A little longer term, the lower end of all those jobs are gonna anyway in a puff of tokens.
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).
NYC's advantage is that older office buildings are more amenable to adaptive reuse.
Modern office buildings have deep floor plates and sealed windows, relying heavily on HVAC and artificial lighting to make the center of the building habitable. Bedrooms require exterior windows, so an optimal floorplan is a ring of bedrooms around the outside which leaves gobs of low value square footage in the middle.
Yes, this is a huge advantage (and one among several reasons why malaise in the commercial real estate market in other US cities doesn’t transfer easily into lessons about NYC’s market).
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!
Odds are they he gets bogged down in the morass of city government and moderates out of lack of willpower and understanding of the levers of city government.
"Regardless of which side you tend to be on, it seems like it will be a useful experiment!"
I strongly disagree.
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).
Even if (a big ‘if’) that’s true, how is stock being destroyed? Investment returns maybe, but not supply.
How will he do that?
> How will he do that?
Through the evil power of socialism!! (/s)
SF will recover after a few more AI billboards
Personally, as a long time visitor to SF, the billboards are one of the best parts ;)
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.
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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.
Yeah, when I hear about how the tax changes are going to result in a huge exodus of millionaires it's not backed by data. The data shows millionaires actually move LESS than the general population. Places that instituted high taxes didn't see an exodus. It turns out if you have a great city with great physical and social infrastructure, people want to be there. Seattle is building both. The physical infrastructure is better now then when I moved there 10 years ago. I just took a train to Bellevue from downtown Seattle for a couple bucks. Waterfront looks amazing and beautiful now. City is really clean.
The cross-lake rail is just amazing. I commuted to Bellevue up until my retirement recently and I really liked it the couple of times I took it.
I don't want to pretend Seattle's perfect. It is very difficult to build new housing here thanks to well-meaning regulatory reform; as someone else noted, you used to be able to build fairly small apartments and that's not legal now. It'd also help a ton if the liberal centrist business-oriented cohort and the progressive wing could figure out how to work together without all the finger pointing. But it's an excellent city.
If they can help figure out how to make turning office space into apartments attractive that will solve the vacancy problem and help keep housing costs at bay.
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-...
A few years ago I was involved in purchasing a commercial building for split purposes. After viewing several spaces it became clear how critical plumbing location were to thinking about how a space could be used. We looked at a few where owners had attempted to change the layout in strange ways. In the end we decided our two goals were not well suited to a single building so we leased a production space and purchased a smaller building for other purposes.
Another issue is that a lot of those office buildings use post tensioned cables in the concrete slabs so making a hole needs to be done very carefully to avoid the cables. Not only do the cables provide a lot of structural support but breaking a cable is like cutting a stretched rubber band except with steel cables and with literally tons of force stretching the cables.
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.
> 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.
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.
Bedrooms are where people spend majority of their time when awake. It is where kids play, do homework, adults work from home, watch youtube, read internet.
Unless we are talking about super large appartment with tons of rooms, they need windows
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.
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.
From a landlord’s point of view, efficiency is about how much rent you can get for it, either directly or by making nearby units more attractive. Hidden away on an upper floor doesn’t seem very attractive as a commercial space?
If they can’t rent the interior for much, that’s going to make replacing it with a new building look better because it’s more efficient.
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.
> 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.
Minimum DSCRs have long been used to monitor the current value of a property, and less income is less income.
https://www.jpmorgan.com/insights/real-estate/commercial-ter...
> 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.
This makes no sense. Why would a lender not want to keep tabs on their investment? What does shell game (a game where someone is intentionally deceived) even mean here?
Yep, the issue is that recalculating DSCR doesn't happen on the right timescale to incentivize reducing rents, instead incentivizing keeping vacancies open and using a pro forma DSCR.
The banks know this is a structural issue, but are likewise incentivized to keep "strong assets" on their balance sheet, rather than a bunch of troubled assets bound for default.
The claim isn't that they can keep this up forever, it just needs to last another quarter, every quarter.
The shell game is both parties knowing that the cups are all empty but still playing because it's better for them both to do so.
DSCR is calculated at least once per year. I don’t know what pro forma could mean here, it’s purely a cash flow calculation. The money came in, or it didn’t.
> The claim isn't that they can keep this up forever, it just needs to last another quarter, every quarter.
I don’t understand what this means, or what is being “played”, the lenders all have a near real time view into the business. The lack of cash flow can’t be papered over without engaging in fraud, but it’s also up to the lender to decide if they want to take action due to a failing DSCR.
It's not easy, but some people are trying it! https://www.npr.org/2026/02/21/g-s1-110595/from-cubicles-to-...
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.
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
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.
The bipartisan housing bill that Trump has refused to sign included provisions for encouraging this.
"The bigger culprit, though, is the tech sector. Its astonishing decadelong push for office space, and equally astonishing slowdown, left downtown Seattle with a gap between supply and demand that will be very difficult to bridge."
Turn them in to housing.
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If that isn't just anti-immigrant snark, it is at least not reading TFA.
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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"
Convert some to cheap residential. Solves both problems: affordable housing as well as rebalancing supply and demand for office space.
This was covered in the article, only a small fraction of the office space can be converted to residential.
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