Will AI Help Revive Seattle’s Economy and Real Estate Market?

by Danny Varona & Kyle Bergquist

Long before artificial intelligence became the dominant story in technology, Seattle was already helping build its foundation.

Amazon began developing the technology behind Alexa in 2011, later acquiring AI and text-to-speech startups that helped bring the Amazon Echo to market in 2014. That same year, Apple acquired Seattle cloud startup Union Bay Networks. Over the following five years, Apple’s local presence grew to more than 500 employees, many focused on machine learning and products such as Siri.

Microsoft and Amazon had already established the region as a global technology center. Google, Meta, Apple and others followed, creating one of the largest concentrations of software and engineering talent outside Silicon Valley.

The University of Washington has also supplied a steady pipeline of highly skilled graduates and research. UW currently ranks among the leading universities in the country for both computer science and artificial intelligence.

These pieces reinforce one another. Major employers attract talented people. Those people launch new companies, attract investment and bring in even more talent. That cycle helped establish Seattle as a leader in software, cloud computing and online retail.

Now, it may position Puget Sound near the center of the AI economy.

Take It Home

The past several years have been difficult for Seattle’s technology and commercial real estate sectors.

Technology companies expanded rapidly during the pandemic and then reduced their workforces as growth slowed. King County’s unemployment rate rose from approximately 3% in December 2021 to 5.7% in January 2026.

At the same time, hybrid work left Seattle with far more office space than it needs. The city’s office vacancy rate has climbed to approximately 36%, among the highest in the country, and some downtown towers have sold at discounts exceeding 50% from their previous values.

AI may now be helping to change that trajectory.

In Bellevue, OpenAI leased approximately 300,000 square feet, Databricks signed a 160,000-square-foot lease, xAI took a full floor at Lincoln Square South, CoreWeave doubled its local footprint and Crusoe opened an engineering hub.

Seattle is seeing new activity as well. Anthropic expanded its footprint to approximately 113,000 square feet at Dexter Yard, DocuSign committed to 116,000 square feet at the JPMorgan Chase Center and Superhuman signed a new lease.

Seattle’s lower office rents may also become an advantage. According to Newmark, average Class A asking rents are approximately $67.58 per square foot in Bellevue, compared with $51.01 in Seattle.

The employment numbers are improving too. After reaching 5.7% in January, King County’s unemployment rate declined to 4.7% just five months later.

AI will not solve Seattle’s office vacancy problem overnight. But after several years dominated by layoffs, remote work and rising vacancies, the direction appears to be changing.

That matters for residential real estate. Puget Sound housing has always been closely connected to the health of the technology sector. Employment growth supports buyer confidence, relocation activity and housing demand throughout Seattle, Bellevue, the Eastside and surrounding communities.

AI may not single-handedly save Seattle, but the region has many of the ingredients needed to benefit from its growth. That is an encouraging development for both the local economy and the Puget Sound housing market.