Downtown Bellingham office space was tougher to find in late 2024 as retail vacancies rose
There were fewer places to lease office space in downtown Bellingham during the fourth quarter of 2024 compared to the previous year, though it was a different story outside of the downtown sector. At the same time, the vacancy rate for downtown retail space is on the rise.
Citywide, the office vacancy rate dropped from 4.7% in the fourth quarter of 2023 to 4.1% in 2024 4Q, as the average office space rent increased from $18.24 per square foot to $19.69, according to a real estate report by Ryan Martin, co-owner and broker at Pacific Continental Realty, LLC.
“Downtown Bellingham’s office market showed particularly encouraging signs, with vacancy rates dropping from 8.2% in the third quarter to 6.1% in the fourth quarter,” Martin said.
In 2024’s third quarter, downtown Bellingham’s office space vacancy rate jumped to 8.18%, more than double the city’s average, according to previous reporting by The Herald. Downtown’s retail space vacancy rate was 8.39% in the third quarter.
Notable downtown office buildings such as The Herald Building, Crown Plaza and the Bellingham National Bank Building all welcomed new tenants in the fourth quarter.
“However, Barkley Village diverged from the overall trend, experiencing a significant increase in office vacancy, with more than 30,000 square feet of additional vacant space entering the market by year’s end,” Martin said.
Although office space had some positive changes at the end of 2024, Bellingham’s retail space vacancy increased.
“Downtown Bellingham’s retail vacancy climbed to 9.5%, largely influenced by the relocation of Lighthouse Mission’s Base Camp to Old Town. The former Tube Time/Public Market building, which represents 25,059 square feet of newly available space, has been listed for sale as a redevelopment opportunity. Barkley Village also contributed to the overall vacancy increase, adding 19,131 square feet of unoccupied retail space in last year’s fourth quarter,” Martin said.
Compared to 2023, Bellingham’s retail space vacancies increased from 3.3% to 3.8% in the fourth quarter. The asking rent prices for retail space across the city decreased from $19.78 to $18.49 per square foot.
Bellingham’s industrial commercial real estate market saw minor changes in the fourth quarter of 2024, reaching a 2% vacancy rate compared to 1.2% in 2023’s fourth quarter. The average asking rent price was 99 cents per square root, down 10% compared to 2023.
“While the industrial market appeared quiet, underlying economic factors could drive significant shifts in 2025,” Martin said. “Ongoing concerns about tariffs on Canadian manufacturers have already sparked increased interest from cross-border businesses exploring relocation or expansion opportunities in the U.S. If demand from Canadian firms accelerates, the limited industrial inventory in Bellingham, Ferndale and Blaine could tighten rapidly, placing upward pressure on lease rates and availability,” Martin said.
Martin creates his quarterly real estate reports by using 26 spreadsheets of statistical local data, sorting the data by real estate categories and updating the data and vacancy rates regularly.
