Market & Geographic Cost Analysis
How competitive is Kirkland’s broader business environment? Commercial space and workforce conditions shape where businesses can operate and hire. Explore how Kirkland compared on commercial inventory, vacancy, rents, and available space, as well as earnings and workforce availability.
Although not primarily controlled by the City, broader market and geographic conditions are important conditions to consider. Businesses make location decisions based on total operating economics, not taxes and fees alone.
This section looks at commercial space and workforce for Kirkland and the same four peers used in the tax and fee analysis: Bellevue, Bothell, Issaquah, and Redmond. Neither is set by City policy in the way a tax rate or a fee schedule is, but both are shaped by it over time. A favorable tax position is worth little to a business that cannot find commercial space or hire workforce.
What Does This Analysis Mean for Kirkland?
- Commercial space availability, rather than cost, is the greater constraint on Kirkland’s competitiveness. Rents are generally comparable to peer cities and vacancy is low, but the amount of space availability - particularly for retail and industrial uses - limits the businesses Kirkland can accommodate.
- High rents do not necessarily indicate Kirkland is uncompetitive. Low vacancy alongside high rents indicates strong demand for limited space. For retail in particular, businesses have occupied nearly all of the space that exists.
- Kirkland’s workforce conditions are broadly comparable to its Eastside peers. Earnings, household incomes, and commute times do not indicate a meaningful competitive disadvantage for businesses locating in Kirkland.
- Kirkland competes for workers within a regional labor market, not primarily through its resident workforce. About 90 percent of jobs in Kirkland are held by people living elsewhere, making regional transportation access important to employers’ ability to hire.
- The market conditions most relevant to City policy are space and access. The analysis points toward maintaining commercial space in a range of sizes and price points, ensuring regional access to the space as more consequential than differences in workforce characteristics among peer cities.
Commercial Space
High commercial rent is often cited as a potential disadvantage to Kirkland’s competitiveness, but rent alone does not indicate whether a commercial market is competitive. Rent reflects the interaction between the amount of space available and demand for that space. High rents paired with low vacancy can indicate a strong market where businesses are competing for limited space, while high rents paired with high vacancy can indicate space is overpriced relative to demand.
For Kirkland, the important question is not simply whether rents are higher than in peer cities, but whether businesses can find space in the sizes and at the price points they need. The analysis below considers inventory, vacancy, average rent, and available space together to answer that question.
Inventory by Building Type
Inventory is the amount of space that exists, regardless of occupancy. Use the tabs to switch between retail, office, and industrial space.
TipWhat to notice
Kirkland’s industrial space inventory amounts to around 3.2 million square feet, lower than the majority of its peer cities.
TipWhat to notice
Kirkland’s office space inventory amounts to roughly 6 million square feet, significantly lower than Bellevue and Redmond but on par with other peer cities.
TipWhat to notice
Kirkland’s retail space inventory amounts to roughly 3.5 million square feet, ranking it the third largest after Bellevue at 9.7 million square feet, and Redmond at 3.6 million square feet.
Vacancy by Building Type
Vacancy is the share of existing inventory that is unoccupied. It is the most direct measure of how tight a market is, and it is the reason rents rise or fall. Use the tabs to switch between retail, office, and industrial space.
TipWhat to notice
Kirkland’s rate is about 2.9 percent percent, on par with Bellevue’s (2.8 percent) but lower than other peer cities. Kirkland’s industrial inventory is small relative to Bellevue, Bothell, and Redmond, so even a moderate vacancy rate represents very little actual space.
TipWhat to notice
Office vacancy is high overall. Kirkland’s rate is 5.8 percent, which is lower than three out of the four peer cities. Office is the building type where the regional story diverges most from retail and industrial, which can reflect the post-2020 softening of the office market. Kirkland also has a smaller office inventory, potentially holding occupancy better than Bellevue’s downtown towers.
TipWhat to notice
Vacancy is low everywhere on the Eastside. Kirkland’s rate is about 2 percent, effectively the same as Bothell (1.8 percent) and Redmond (2.0 percent). With a large amount of retail inventory and a low vacancy rate, Kirkland’s retail market is strong.
Average Rent per Sq. Ft. by Building Type
Average asking rent is the price the market charges for available space, expressed per square foot per year. Read against vacancy, it shows whether rents are high because the space is in demand or in spite of it. Use the tabs to switch between retail, office, and industrial space.
TipWhat to notice
For industrial space, Kirkland is the least expensive of the five cities at about $20 per square foot, alongside Bothell ($20). Combined with Kirkland’s low industrial vacancy, that pattern is consistent with an older, fully absorbed stock rather than with weak demand: the space that exists is inexpensive and occupied, and there is very little of it.
TipWhat to notice
Kirkland’s office space is around $40 per square foot, similar to its peers. Kirkland’s position relative to Redmond and Bothell is the more useful comparison for the office tenants Kirkland actually competes for.
TipWhat to notice
Kirkland is at $35 per square foot for retail space, on par with most of its peers; Issaquah is the highest at $37 per square foot. Given retail vacancy is near 2 percent, a high retail rent in Kirkland is the expected result of scarcity and should be described as such rather than as a cost disadvantage.
Available Commercial Space (Sq. Ft.)
Vacancy is a rate; available space is the number of square feet actually on the market. This chart matters because businesses lease square feet, not percentages. A 2 percent vacancy rate means something different in a city with five million square feet of retail than in one with one million.
TipWhat to notice
Kirkland has around 126,000 square feet of industrial space available, significantly less than Bothell and Redmond but on par with other peer cities. Based on business prototype space estimates, small manufacturers need around 37,000 square feet while large manufacturers need over 1 million. The city’s total availability amounts to around three small manufacturing spaces.
TipWhat to notice
Kirkland has roughly 467,000 square feet of office space available, significantly less than Bellevue but on par with other peer cities. Compared to business prototype space estimates, a large computer systems design firm needs about 29,000 square feet. The city’s total availability amounts to around sixteen large office firms.
TipWhat to notice
Kirkland has roughly 85,000 square feet of retail space available, significantly less than Bellevue but on par with other peer cities. Put against the business prototypes, the scale of that number is clear. The large retail prototype occupies about 92,000 square feet, more than the entire available retail inventory in Kirkland. The small prototype occupies about 7,000 square feet, so the city’s total availability amounts to roughly a dozen small retail spaces.
Sources: CoStar, 2021-2026
Workforce
The second set of market conditions concern labor. Businesses locate where they can hire, and for most of the business types examined in this study, the cost and availability of workers matter. The charts below compare Kirkland with the four peer cities on what workers earn, households earn, how many are out of work, where Kirkland’s workers and residents commute, how long that commute takes, and how many work from home. Together they describe a labor market that Kirkland shares with its neighbors far more than it competes with them for.
Median Earnings by Peer City
Median earnings measure what an individual worker who lives in each city earns in a year. For an employer, it is a proxy for prevailing wages and for the skill mix of the resident workforce.
TipWhat to notice
Median earnings for Kirkland residents are about $119,000, in the middle of the peer group. All five cities sit well above the King County and statewide medians, reflecting the concentration of technology and professional employment in the area. Redmond’s position at the top is largely a function of Microsoft and the software employment clustered around it.
Median Household Income by Peer City
Median household income combines the earnings of everyone in a household. It is the measure most relevant to consumer-facing businesses, because it describes the spending capacity of the local customer base.
TipWhat to notice
Kirkland’s median household income is about $150,000, again in the middle of the group. For retailers and restaurants, the takeaway is that the household market in Kirkland is affluent and comparable to its neighbors. The difference between Kirkland and Bellevue on this measure is about 10 percent, not a gap that would steer a consumer business toward one city over the other.
Unemployment by Peer City
The unemployment rate indicates how much slack exists in the local labor pool. A low rate means employers are competing for workers; a high rate means workers are more readily available, but can also signal weakness in the industries that employ residents.
TipWhat to notice
Kirkland’s unemployment rate, about 4.6 percent, is the second highest in the peer group. The higher rates in Kirkland and Redmond are consistent with a resident workforce concentrated in technology, a sector that has shed jobs regionally since 2022. From an employer’s standpoint, the practical effect is a somewhat deeper pool of available professional workers than in the other three cities.
Inbound and Outbound Commuters
This chart shows where a city’s employed residents work and where the people who hold a city’s jobs live. It is the clearest single measure of how much a city’s labor market is its own.
TipWhat to notice
Of about 48,900 employed Kirkland residents, 88 percent work outside the city, and of about 53,800 jobs located in Kirkland, 90 percent are held by people who live somewhere else. Only 5,600 people both live and work in Kirkland. The city is a net importer of workers by a modest margin, with more jobs than employed residents, but the more important point is that both flows are large in both directions. Kirkland’s competitiveness as a place to hire depends on regional access, meaning how easily workers from elsewhere can reach it, more than on the characteristics of its own residents.
TipWhat to notice
Of about 75,300 employed Bellevue residents, 79 percent work outside the city, and of about 158,100 jobs located in Bellevue, 90 percent are held by people who live somewhere else. Only 16,000 people both live and work in Bellevue.
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Of about 24,300 employed Bothell residents, 91 percent work outside the city, and of about 34,200 jobs located in Bothell, 94 percent are held by people who live somewhere else. Only 2,100 people both live and work in Bothell.
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Of about 20,000 employed Issaquah residents, 89 percent work outside the city, and of about 31,900 jobs located in Issaquah, 93 percent are held by people who live somewhere else. Only 2,100 people both live and work in Issaquah.
TipWhat to notice
Of about 39,600 employed Redmond residents, 68 percent work outside the city, and of about 122,400 jobs located in Redmond, 90 percent are held by people who live somewhere else. Only 12,500 people both live and work in Redmond.
Mean Travel Time by Peer City
Mean travel time to work, measured for each city’s residents, indicates how well connected a city is to the regional job base and, by extension, how accessible its employers are to the regional labor pool.
TipWhat to notice
Kirkland residents average about 24 minutes to work, with a small range between peer cities (23 to 27 minutes). Kirkland sits inside the central Eastside commute shed served by I-405 and SR 520, and the travel times confirm its location is not a disadvantage in reaching either workers or jobs.