A simulation-based framework for assessing seismic risk of spatially distributed buildings is developed by taking the spatial correlation of seismic excitations into account. For each of seismic events compiled in a synthetic earthquake catalog, inelastic seismic demand on buildings that are approximated by bilinear single-degree-of-freedom systems is compared with uncertain structural capacity to evaluate seismic damage severity. The proposed framework is employed to investigate the sensitivity of the estimated seismic risk of sets of buildings to the degree of spatially correlated and simultaneously occurring seismic excitations. In particular, four correlation levels—no correlation, full correlation, and partial correlation with/without intra-event components—are considered. The assignment of the partial correlation is based on a recently developed spatial correlation model, and the sets of hypothetical buildings mimic existing building stocks in downtown Vancouver. The analysis results highlight that underestimation or overestimation of correlation of seismic demand could lead to very different probabilistic characteristics of aggregate seismic loss although its mean is unaltered. The sensitivity analysis results suggest that uncertainty in structural capacities as well as average local soil conditions is of relative importance.