BELLINGHAM, WA (MyBellinghamNow.com) – Bellingham’s commercial real estate market is holding steady amid its struggles to fill vacancies downtown.

That’s according to a new report by Pacific Continental Realty co-owner Ryan Martin, who analyzed first quarter trends in 2026.

He says the city’s overall market for retail space remained steady but fluctuated in different areas.

“Overall, the Bellingham commercial real estate market remains stable, supported by consistent leasing activity, particularly in the industrial sector,” Martin said. “This is despite ongoing uncertainty in the broader economic environment that is impacting investment sales.”

Barkley Village saw high demand from retailers with a roughly 3% vacancy rate, while downtown had its vacancy rate rise to just over 12% while having half the average rental rate as Barkley.

Downtown and Sunset Square combined for more than half of the vacant retail space in Bellingham.

Martin says the trend was also reflected in office space, as downtown alone accounted for more than half of the city’s vacancies.

Meanwhile, the market for industrial space remained strong, with vacancy rates dropping to their lowest level since 2023.

Much of the demand was seen in the waterfront district.