Snohomish County’s Retail Market Is the Tightest in Puget Sound — And Q1 2026 Just Started Testing That

Q: How does Snohomish County’s retail vacancy compare to the rest of the Puget Sound region?
A: Snohomish County ended Q4 2025 at 3.4% retail vacancy — the tightest rate in the Seattle-Puget Sound metro, according to Kidder Mathews. While the broader Seattle market finished 2025 at 4.0% and continued rising into Q1 2026, Snohomish County’s retail market has stayed tighter because almost no new retail square footage has been built in years. That scarcity protects existing landlords but creates a challenging environment for major new developments like Waterfront Place and Millwright Phase 2 that need to recruit tenants into a market where selectivity is rising.

Why Snohomish County Retail Stays Tight

Here’s a number that doesn’t get talked about enough: Snohomish County’s retail vacancy rate ended 2025 at 3.4 percent.

For context, the broader Seattle metro finished 2025 at 4.0 percent, and that number was climbing. King County’s vacancy was trending higher through the back half of the year. Portland hit 4.8 percent in Q1 2026. By every regional benchmark, Snohomish County’s retail market is the tightest in Puget Sound — and it has been for most of the past three years.

That’s a complicated backdrop for everything happening on Everett’s waterfront right now.

The short answer, according to Kidder Mathews’ Q4 2025 retail market data cited by the Everett Herald in February 2026, is construction — or rather, the lack of it. Almost nothing has been built. The last major new shopping center project in Snohomish County was years ago, which means existing retail square footage is scarce. When tenants look for space, their options are limited — which keeps occupancy high and keeps asking rents elevated.

The Everett Herald framed it plainly: “Few vacant retail spaces in Snohomish County.” At 3.4 percent vacancy, that’s not just a real estate headline — it’s a physical reality that shapes which businesses can afford to open here.

But Q1 2026’s Kidder Mathews data, published by The Registry Pacific Northwest on April 8, 2026, introduced something new into the conversation: a trend line. Vacancy is “creeping higher.” Tenants are “growing more selective.” The words are measured — this is not a market in distress — but they signal that the floor-tight conditions of the past two years are starting to soften at the margins.

What This Means for Waterfront Place

The Port of Everett’s Waterfront Place development has approximately 63,000 square feet of planned retail and restaurant space across the full buildout of Fisherman’s Harbor and Marina Village. A meaningful portion of that is already occupied and generating activity: Tapped Public House opened in March 2026 with the largest waterfront rooftop deck in Snohomish County; Marina Azul Cocina & Cantina arrived in spring 2026; Menchie’s Frozen Yogurt opened at the marina in March; Rustic Cork Wine Bar has been operating for months; Jetty Bar & Grille remains a marina staple; South Fork Baking Co. and Anthony’s HomePort anchor the established tenant base.

That’s a functioning dining and retail district — and it’s operating in a county where retail space is genuinely scarce. In a 3.4 percent vacancy environment, every new restaurant that opens at Waterfront Place is competing not just with other waterfront tenants, but with a county-wide retail market where operators are getting more selective about where they commit.

The remaining Parcel A7 restaurant site — the Port’s search for a flagship dining tenant at the last undeveloped waterfront pad — is an open question in this context. A tight market should theoretically accelerate recruitment. But Q1 2026’s rising selectivity from prospective tenants complicates that math. Operators have more choices than they used to, and they’re using them.

The Millwright Phase 2 Question

The more significant long-term implication of the Q1 2026 retail data is for Millwright District Phase 2, which envisions up to 120,000 square feet of retail, entertainment, and dining — the movie theater, mini golf, arcade, bowling, specialty shops, gyms, and salons announced as the anchor concept, with a projected opening window of mid-2029.

Between now and 2029, the retail market will complete several more cycles. The current “vacancy creeping higher, tenants more selective” phase could resolve in either direction. What the Q1 2026 data confirms is that the foundation is solid. A county that has held below 3.5 percent vacancy for multiple years, with no meaningful new inventory in the pipeline, is a county where well-positioned retail real estate still works. Millwright Phase 2’s 120,000 square feet will be the largest single retail addition Snohomish County has seen in years — arriving into a market that will almost certainly still be undersupplied by mid-decade.

Downtown Everett and the Bank of America Signal

One notable data point in downtown Everett’s retail landscape deserves separate attention: the 12,000-square-foot Bank of America building at 1602 Hewitt Avenue, which came to market this spring for the first time in 60 years. Skotdal is marketing the building with a three-lane drive-through and 92 covered parking spaces.

At 3.4 percent county-wide retail vacancy, a 12,000-square-foot class-A footprint in downtown Everett should theoretically be in high demand. The fact that it’s available at all is a testament to how thoroughly the banking sector has contracted its physical footprint. The question is whether the retail market’s tightness is enough to attract a non-bank tenant willing to work with that building’s legacy configuration.

The comparison to the office market is instructive: Snohomish County office vacancy hit 10.7 percent in Q1 2026 — nearly triple the retail rate. Office space is available and under pressure; retail space is not. That divergence matters for how developers think about the use mix at Waterfront Place and Millwright Phase 2. Retail and dining are still the anchor draw. Office demand follows workers, not the other way around.

The Snohomish County Retail Advantage — For Now

For anyone tracking Everett’s development story, the retail market data adds an important piece of context. The waterfront, downtown, the riverfront, and Millwright are all recruiting tenants into a county that remains the most retail-constrained in the region. That constraint cuts both ways.

It means existing retailers perform well. It means new entrants can establish market position before competition multiplies. And it means the large-format entertainment retail vision at Millwright Phase 2 — the first genuine new retail district Snohomish County will have seen in years — will arrive into conditions that still favor well-capitalized landlords.

The Q1 2026 signal worth watching is whether rising tenant selectivity translates into slower absorption at Waterfront Place. The next few quarters of lease announcements will be a real-time test of whether the Port’s restaurant row momentum can hold through a softening. Based on what the data shows right now, there’s no reason to expect it won’t — but the days of almost any tenant being available are giving way to a market that’s starting to pick and choose.

Frequently Asked Questions

Q: What is Snohomish County’s retail vacancy rate?
Snohomish County ended Q4 2025 at 3.4 percent retail vacancy, the lowest in the Puget Sound metro according to Kidder Mathews. Q1 2026 showed the rate beginning to edge higher as tenants grew more selective.

Q: How does Snohomish County compare to Seattle’s retail market?
The broader Seattle metro finished 2025 at 4.0 percent retail vacancy, roughly half a point higher than Snohomish County. Q1 2026 continued that divergence, with the Seattle-area rate climbing while Snohomish County remained below regional averages.

Q: How much retail space is planned at Waterfront Place?
The Port of Everett’s Waterfront Place development plans for approximately 63,000 square feet of retail and restaurant space across Fisherman’s Harbor and Marina Village, with multiple tenants already operating.

Q: How much retail is coming to Millwright District Phase 2?
Millwright District Phase 2 envisions up to 120,000 square feet of entertainment-anchored retail — including a movie theater, mini golf, arcade, bowling, and specialty shops — with a projected opening window of mid-2029.

Q: Why is Snohomish County retail vacancy so low?
The primary driver is a near-complete absence of new retail construction in the county for multiple years. With no significant new inventory entering the market, existing space stays occupied and asking rents remain elevated.

Q: What is happening at the Bank of America building on Hewitt Avenue in downtown Everett?
The 12,000-square-foot former Bank of America building at 1602 Hewitt Avenue became available for the first time in roughly 60 years in spring 2026. Skotdal is marketing the space with a three-lane drive-through and 92 covered parking spaces in downtown Everett.