For the first time in several years, there are indications that the worst may be over for the Seattle region’s battered office market — and artificial intelligence companies appear to be playing a leading role.
The regional office market (spanning Seattle, Bellevue and the surrounding Eastside) posted positive net absorption during the second quarter, meaning companies occupied more office space than they vacated, according to a new report from commercial real estate firm JLL. It’s a notable shift after years of downsizing driven by remote work, layoffs and corporate cost-cutting.
Technology companies accounted for 42.5% of all leasing activity during the quarter, easily outpacing every other industry. JLL said AI-related leasing is on track for a strong year as companies establish engineering hubs in the Seattle region to tap its deep talent pool while taking advantage of office costs that remain well below San Francisco and New York.
In fact, leasing by AI companies has accounted for 21.6% of activity in the Seattle and Eastside year to date, and now the entire AI footprint in the region is 855,000 square feet. That’s double the amount in 2024, according to JLL.
The quarter’s largest deals reflected that trend.
The Pokémon deal helped push the region to 372,000 square feet of positive net absorption for the quarter — reversing a run of quarters in which tenants gave back more space than they took.
The numbers offer an encouraging change after years of gloomy office market reports, but they hardly signal a full recovery. Regional vacancy remains elevated at 23.9%, while overall availability sits at 25%.
Companies continue to consolidate space, landlords are still offering concessions, and asking rents remain under pressure as tenants retain significant negotiating leverage, JLL said in the report
Still, there are indications the market’s fundamentals are improving.
Availability has now declined for two consecutive quarters and has fallen from a peak of 26.5% a year ago. At the same time, JLL reports there is currently no new speculative office construction under way — buildings started without tenants committed — meaning even modest growth in demand could have a greater impact on occupancy than in previous years.
Rather than signaling a broad-based office comeback, the latest leasing data suggests a more nuanced story: AI companies and other fast-growing technology firms are helping stabilize a market that had spent years moving in the opposite direction.
The report reinforces a trend GeekWire has been tracking over the past year as AI companies expand their presence across the Seattle region. Alongside Microsoft and Amazon, companies including OpenAI, Anthropic, xAI, Armada and Anduril have been building engineering teams in the area, drawn by one of the country’s deepest concentrations of AI and cloud computing talent.
Whether that momentum continues will depend on how quickly AI hiring expands and whether more companies decide they need additional space for a new generation of engineers. But after several years defined by shrinking footprints and empty offices, the second quarter offered the first meaningful indication that Seattle’s office market may finally be finding its footing.
Salesforce’s Tableau business has renewed its lease for roughly 114,000 square feet at the Data 1 office building in Seattle’s Fremont neighborhood, extending its long-term home in the city.
The lease renewal takes effect after the current agreement expires in 2029, according to an announcement Monday first reported by the Puget Sound Business Journal. It marks the largest office lease renewal in Seattle this year.
The renewal continues Tableau’s long association with Fremont, where the company added offices over the years to accommodate its rapid growth before its $15.7 billion acquisition by Salesforce in 2019. Salesforce CEO Marc Benioff once said the Seattle region would become the company’s “HQ2” with the Tableau deal.
However, the years following the acquisition brought significant change. Salesforce conducted multiple rounds of layoffs that affected Tableau employees and trimmed its Seattle office footprint as hybrid work reshaped demand for office space.
Former Tableau CEO Mark Nelson also departed in 2024 after leading the business for two years. Before the acquisition, Tableau had grown to about 4,200 employees worldwide, about half of them in the Seattle region.
Salesforce originally planned to sublease the Data 1 building at 744 N. 34th St., which Tableau opened in 2018. But it then quickly reversed course in 2023, instead choosing to put its nearby Fremont headquarters building on the sublease market.
The Tableau news also comes at a changing time for Fremont.
Last year, Google announced plans to leave its Fremont campus, bringing all of its employees in Seattle together at its South Lake Union campus. At the time, it cited a desire for better collaboration and community. The pending departure has meant a large chunk of prime office space remains available for lease along the Lake Washington Ship Canal.
However, other companies and organizations have discovered the so-called “Center of the Universe.” Chip maker Nvidia recently leased 28,000 square feet of space at The Fremont Lake Union Center building and the global biotech nonprofit PATH last year took over offices formerly occupied by Tableau in Fremont’s West Dock building.
We’ve reached out to Salesforce about the Tableau lease, and we will update this post as we learn more.
UPDATE with statements from Salesforce and Hess Callahan Grey Group:
“Data 1 has been a critical hub for our local employees and customers, and we are thrilled to continue our presence in Fremont,” said Rob McCorkindale, VP of Global Real Estate Portfolio & Transactions at Salesforce. “This renewal underscores our continued investment in the Seattle region and our focus on creating spaces that inspire our people to do their best work.”
“Salesforce has been an exceptional tenant and a valued presence in the Fremont community since Data 1 was completed,” said Mark Grey, partner at Hess Callahan Grey Group. “Their decision to extend their commitment to the building speaks to the enduring appeal of Fremont and the importance of creating great environments for leading employers. Salesforce is an integral part of the neighborhood’s technology ecosystem, and we are proud to continue supporting their long-term presence in Seattle.”
This story originally appeared on Real Estate News.
A federal court has turned down the Federal Trade Commission’s request to declare a rentals deal between Zillow and Redfin “presumptively unlawful” before trial next month.
On Wednesday, July 8, Judge Anthony J. Trenga of the U.S. District Court for the Eastern District of Virginia denied the FTC’s motion for partial summary judgment in its case alleging Zillow and Redfin violated antitrust laws when Zillow paid $100 million to become Redfin’s exclusive multifamily rental listings provider in early 2025.
After a hearing Wednesday morning, Trenga said he found “genuine disputes of material fact” regarding the FTC’s ask.
Last October, five states joined the FTC in suing Zillow and Redfin over their rentals partnership, and the cases were merged in November. The defendants sought a dismissal earlier this year, which the judge denied, and on May 20 filed an official response to the FTC’s claims.
The complaint is scheduled for a bench trial, meaning the judge will hear and decide the case without a jury, on Aug. 24.
In their June 10 motion, the plaintiffs asked for declarations that would have put more of a burden on Zillow and Redfin at trial if they had been granted. Specifically, they asked the court to:
On June 24, the defendants asked the court to reject the FTC’s motion outright.
Regarding the relevant markets, they said rental competition is local, not national, and non-ILS companies such as Google and social media outlets compete for rental advertising dollars with ILSs like Redfin and Zillow. Thus, those types of companies should not be excluded as competitors in the same market.
In response to the FTC’s request to to define the Zillow-Redfin deal as an acquisition of assets that is presumptively unlawful, the defendants argued that it is an open question whether the deal was a merger and that the presumption request was improper at this stage of the proceedings.
In his July 8 ruling, Trenga agreed with the defendants, finding that “genuine disputes of material fact existed” regarding “the relevant product market, relevant geographic market, and the presumptive illegality of Defendants’ challenged activity for purposes of Plaintiffs’ claim under Section 7 of the Clayton Act.”
The defendants, not surprisingly, supported the ruling.
“The FTC asked the court to partially resolve this case before Zillow has the opportunity to present its full evidence at trial — evidence that will demonstrate the pro-competitive effects of this partnership for renters and housing providers,” Zillow said in a statement on its website.
“We are pleased with the court’s decision today, and look forward to presenting the full record at trial next month.”
Similarly, a Redfin spokesperson told Real Estate News the company “strongly” disagrees with the FTC’s allegations and is eager to present “the full facts” at trial.
“The reality is simple: Redfin’s actions are pro-competitive and benefit consumers,” the spokesperson said in a statement.
“Redfin pursued the Zillow partnership to maintain and grow Redfin’s rental business. And because of that decision, Redfin’s websites have more rental listings than ever before and Redfin can invest even more in search innovations that directly benefit our customers.”
The FTC declined to comment for this story.
Add another name to Bellevue’s growing list of AI tenants.
Taiwan-based eNeural Technologies is setting up its North American headquarters in the city, joining a wave of AI companies — from CoreWeave to xAI to OpenAI — that have staked out office space east of Seattle over the past year.
eNeural plans to invest $3.5 million in the Seattle region over the next three years and create about 30 jobs, more than 20 of them AI engineering positions, according to Greater Seattle Partners, the regional economic development group that announced the expansion.
The company said it eventually envisions its Bellevue office growing into a core edge AI research and development center with more than 500 employees over the next decade.
The company builds lightweight, low-power AI software and chips that let devices — logistics equipment, vehicles, smart city infrastructure — run AI directly on-site rather than relying on the cloud. eNeural says its portfolio spans model optimization tools, self-learning edge platforms, and neural processing unit silicon IP, along with vision-language and large language model tools built for private, secure deployments.
eNeural founder and Chairman Jiun-In Guo called the region “one of the most innovative technology ecosystems in the world” and said establishing an HQ in Bellevue gives the company access to “a unique combination of world-class AI talent, global technology leadership, and proximity to key enterprise customers.”
eNeural’s path to Bellevue ran through Greater Seattle Partners’ SelectUSA Seattle Spinoff program, which introduced the company to the region’s AI and tech ecosystem in 2025.
eNeural’s arrival adds to a run of AI companies moving in alongside tech giants Amazon and Microsoft and staking claims on the Eastside over the past year:
Seattle did notch a win of its own this week with the news that Anthropic is leasing 113,000 square feet of space across multiple floors in a South Lake Union development.
The Bellevue office will serve as the eNeural’s primary hub for customer engagement, strategic partnerships, business development, and advanced AI engineering across North America.
Anthropic is embarking on a major expansion in Seattle, underscoring how artificial intelligence companies are emerging as one of the few bright spots in the region’s office market.
The maker of the Claude AI model recently finalized a lease at Dexter Yard North in Seattle’s South Lake Union neighborhood, capping months of speculation about the company’s expansion plans in the region.
Terms of the deal were not publicly disclosed, but CoStar News reports that the company leased 113,000 square feet of space across multiple floors in the north tower at 700 Dexter Avenue North. CoStar called it one of the largest office deals of the year so far in Seattle.
The expansion would significantly increase Anthropic’s footprint in Seattle, where the San Francisco-based company established an engineering office in 2024 as it recruited talent from the region’s deep pool of AI researchers and software engineers.
It would also place Anthropic next door to Amazon. The companies in April expanded their existing partnership: Amazon committed to invest up to $25 billion in Anthropic, which simultaneously made a $100 billion-plus spending commitment to AWS over 10 years.
The following month, Anthropic announced $65 billion in funding at a $965 billion valuation, thought to be the last venture round before an initial public offering later this year.
On Thursday, Anthropic released Claude Sonnet 5, which the company says “can make plans, use tools like browsers and terminals, and run autonomously at a level that, just a few months ago, required larger and more expensive models.”
Also this week, The U.S. Department of Commerce removed export controls on the company’s Claude Fable 5 and Mythos 5 models, part of an ongoing back-and-forth with the Trump administration.
Anthropic’s Seattle lease provides hope that demand from AI companies could help revive parts of Seattle’s office market after several years of elevated vacancy driven by remote work and tech industry cutbacks. Seattle’s office vacancy rate inched up to 28% during the first quarter, the highest in the region.
Other AI firms, including OpenAI and Databricks, have also expanded their Seattle-area office footprints in recent months. In those instances, the companies chose to grow in nearby Bellevue.
Dexter Yard, a two-building office and life sciences campus developed by BioMed Realty, opened in 2022 and was designed to accommodate both technology and biotech tenants. The north tower contains approximately 163,000 square feet of office and lab space.
Anthropic has a number of open engineering roles spread across Seattle, New York and San Francisco. The company says it expects all staff to be in one of their offices at least 25% of the time.
A spokesperson for Anthropic acknowledged the new lease, but did not respond to requests for additional comment.
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