Bellingham vacancies jump after Sunset Square, Bellis Fair lose major businesses
Bellingham retail real estate market had another increase in vacancies last quarter, as Bellis Fair mall and Sunset Square lost major businesses.
Last quarter, Bellingham’s commercial real estate market had “significant vacancy increases,” according to previous reporting by The Bellingham Herald, increasing by 2% compared to 2025’s first quarter.
Now in the third quarter, vacancies have increased again by 0.8% to reach 5.3% on Sept. 30, according to a report by Ryan A. Martin, co-owner and broker at Pacific Continental Realty in Bellingham.
Martin said the “most significant impact” was from Sunset Square, where Rite Aid, JoAnn Fabrics, and At Home all closed permanently.
“The shopping center now holds roughly 170,000 square feet of vacant space, representing nearly one-third of all retail vacancy across the Bellingham market,” Martin wrote.
“Bellis Fair Mall also experienced a setback, with overall vacancy rising from 7% to 9.2% following the closure of Forever 21 and several smaller specialty retailers. These closures mirror national downsizing trends among mid-tier mall tenants,” Martin added.
Despite the recent closures, the asking price for leasing retail spaces increased 76 cents in the third quarter, to reach $20.48 per square foot.
“Despite headline vacancies, leasing activity remains healthy among service-oriented retailers, quick-serve restaurants, and local specialty operators, particularly in high-traffic corridors such as Meridian, Bakerview and Lakeway Drive,” Martin said. “Asking rents for well-positioned neighborhood centers have remained relatively steady.”
Office space vacancy remained the same as the second quarter, at 5.2% across the city. The average asking rate for office space increased 27 cents to $19.82 per square foot.
As for Bellingham’s industrial real estate sector, the vacancy rate decreased from 2.2% to 2.1% in the third quarter.
“Average asking rates for industrial space climbed marginally to 99 cents per square foot, supported by steady demand and limited new inventory,” Martin stated in the report.
This story was originally published October 17, 2025 at 2:02 PM.
