[RE]

SEATTLETIMES.COM • 2026-07-04

As downtown Seattle offices empty, city facing years of ‘zombie’ towers

The city’s office economy is in free fall. Since 2020, downtown office properties have lost a staggering $15 billion, or 46%, of their value and are generating $128 million less in property taxes, according to King County assessor’s office data.

For those of you who follow the economics end of collapse but don't necessarily have long memories for what sometimes seems to be incidental newz, about a year ago it was mentioned that a largee tranche of CMBS would mature in 2026, providing a sort of reckoning for the commercial RE market that residential RE faced in 2008.  This is the first update I've seen on the commercial market in quite a while, and with this kind of vacancy rates, SOMEBODIES are not making their coupon payments, and the banks can only carry late payments so long before they have to show it on the books.  When that happens, it forces a write down of their Tier 1 Capital and ups their borrowing costs.  Long story short, this happens too many times to too many banks in a short period of time, you get a credit crisis.

So, are we maybe on the cusp of another credit lockup coming down the pike?  With everything else going down, it's not getting much attention, but I won't be surprised at all after 3rd quarter reporting comes in.

RE