Coeur d’Alene Office Market Report — Q2 2026
The Coeur d’Alene office market closed Q2 2026 with a 4.0% vacancy rate, down about 170 basis points year over year and roughly a quarter of the national office vacancy rate. Market asking rent was $23.95 per square foot, up just 0.7% year over year. Office sales volume totaled $16.8 million over the trailing 12 months (about $10.2 million in Q2 alone), led by the $9.5 million Mineral Drive Office sale in Hayden. The CoStar market cap rate was 9.9%, while the average transaction cap rate on properties that actually sold was 6.4%. Coeur d’Alene remains a supply-constrained, owner-user office market that has largely avoided the national office downturn.
Key Statistics — Coeur d’Alene Office, Q2 2026
| Metric | Q2 2026 | Detail |
|---|---|---|
| Office vacancy rate | 4.0% | Down ~170 bps YoY; about a quarter of the U.S. rate |
| Average asking rent | $23.95/sf | Among the highest in the Inland Northwest |
| Market cap rate (model) | 9.9% | Above ~9.0% U.S.; actual trades have priced tighter |
| Trailing 12-mo sales volume | $16.8M | 24 properties; above 5-yr avg ($12.7M) |
| Buyer profile | Private capital | Owner-users and private investors, not institutions |
| Outlook | Vacancy ~4.0% | No supply wave coming |
Coeur d’Alene Office Market Overview — Q2 2026
The Coeur d’Alene office market closed the second quarter of 2026 with a vacancy rate of 4.0% — down roughly 170 basis points year over year and still inside the market’s five- and ten-year averages of about 3.3% and 3.4%. For perspective, the national office vacancy rate is running in the high teens to low twenties depending on the data source, and comparable coastal downtowns are worse. Regionally, Coeur d’Alene is tighter than both Spokane (about 7.6% earlier in 2026) and Boise (about 8.2%).
That tightness is structural rather than cyclical. The market holds roughly 6.3 million square feet of office inventory — about 2.8 million square feet of 3 Star product and 3.6 million square feet of 1 & 2 Star — and no 4 & 5 Star (high-rise) space at all. There are no glass towers to empty out and no speculative overhang. Only one office building is under construction, about 6,250 square feet in Hayden, against a ten-year average near 30,000 square feet. When a market neither overbuilds nor demolishes much, low vacancy is its natural state — which is why the national “office” narrative never applied here.
Demand held up as well: the market absorbed about 110,000 square feet net over the trailing twelve months — roughly ten times its long-run average — led by owner-users and medical tenants in Hayden and Post Falls.
CDA Office Vacancy, Rents & Absorption — Q2 2026
Market asking rent finished Q2 2026 at $23.95 per square foot — $26.28 for 3 Star space and $22.15 for 1 & 2 Star. Rent growth, however, was just 0.7% year over year, below the 1.5% national pace and a fraction of the market’s own five-year average near 3.9%. CoStar forecasts Coeur d’Alene office rent growth ending 2026 near 0.9%, versus 1.3% nationally.
Why so soft with vacancy this tight? Because rents already ran hard — Coeur d’Alene office rents climbed from roughly $19 per square foot in 2020 to nearly $24 today, including an 8% jump in 2021 — and asking rates are now digesting that run. Quarter-to-date annualized rent growth was negative in most submarkets. This reads as normalization after an outsized cycle, not demand weakness, with tight vacancy likely to convert back into pricing power as medical and education demand keeps compounding into 2027.
Coeur d’Alene office submarkets — Q2 2026
Office Property Sales in Coeur d’Alene — Recent Transactions
Twenty-four office properties traded over the trailing twelve months for about $16.8 million — above both the five-year average ($12.7 million) and the ten-year average ($11.0 million). Q2 alone accounted for roughly $10.2 million of that, versus just $1.8 million in Q1, because one large deal reset the year.
The Mineral Drive Office sale — a fully leased 53,000-square-foot 1985 building in Hayden that traded at $178 per square foot and a 7.6% cap — was the transaction of the year and drove the Q2 volume spike. Across all comparable sales, the average was about $169 per square foot at a 6.4% cap, with properties 94.9% leased at sale and selling within roughly 3% of asking.
With Coeur d’Alene office vacancy at just 4.0% and quality space scarce, well-located buildings are in high demand. Want to know what your office property is worth in today’s market?
Office Cap Rates & Investment Activity — Inland Northwest
The most important number for pricing a Coeur d’Alene office building is a gap. CoStar’s market-model cap rate is 9.9% — above the roughly 9.0% national figure — yet the actual cap rate on the buildings that sold this year averaged 6.4%, with the tightest at 5.0%. The model reflects a low-price, high-yield small market in aggregate; the transaction rate reflects what buyers actually paid for scarce, quality, leased product. When something good comes to market here, buyers compete and pay up.
Private capital accounted for essentially all of the office sales volume over the past year, with owner-users and private investors — not institutions — driving demand. That matters given the cost of debt: the Federal Reserve held its benchmark at 3.50%–3.75% in June 2026 and signaled a possible hike rather than the cut markets had expected, the 10-year Treasury is near 4.5%, and office remains the most scrutinized property type for lenders. Cash-heavier owner-occupants, less sensitive to borrowing costs, continue to anchor this market.
North Idaho Office Market Forecast — 2026
The outlook for the balance of 2026 is cautious optimism. Vacancy should hold near 4.0% — there is no supply wave coming and no demand shock in sight. Rent growth stays modest in the near term as the market digests its post-2020 run, then has room to reaccelerate in 2027 as medical and education demand compounds against a fixed supply base. Cap rates are the variable to watch: with debt costs elevated and the Fed leaning hawkish, there is little fuel for broad compression, but scarce quality product will keep trading tight. Coeur d’Alene is a relative-value, in-migration beneficiary in an otherwise bifurcated national office market — an opportunity, but a selective one, where the individual building matters more than the trend line.
What Q2 2026 Means If You Own Coeur d’Alene Office Property
If you own Coeur d’Alene office property, you own into one of the tightest office markets in the country. At a market cap rate near 9.9%, every $10,000 of net operating income is worth roughly $101,000 — but well-located North Idaho buildings have traded tighter than the model implies, so real values often run higher. With vacancy at just 4.0% — about a quarter of the national rate — and rent at $23.95/sf, quality space is scarce and owner-users are competing for it.
- Thinking about selling? Start with a broker opinion of value to see where your building prices today, then our seller representation team runs the process.
- Holding for income? Scarce quality space is a good moment to review property management and lease structure.
- Have space to fill? See how our leasing team positions Coeur d’Alene office space.
- Compare your asset class: retail, industrial, and multifamily.
Coeur d’Alene Office Market — Frequently Asked Questions
What is the Coeur d’Alene office vacancy rate in Q2 2026?
The Coeur d’Alene office vacancy rate was 4.0% as of the close of Q2 2026, down about 170 basis points year over year. That is roughly a quarter of the national office vacancy rate and tighter than both Spokane and Boise.
Are Coeur d’Alene office rents rising or falling?
Coeur d’Alene office asking rents were $23.95 per square foot in Q2 2026, up just 0.7% year over year. Rents rose sharply after 2020 and are now normalizing, so growth has slowed despite tight vacancy.
What are cap rates for office property in Coeur d’Alene?
CoStar’s market-model cap rate for Coeur d’Alene office is 9.9%, but the average cap rate on properties that actually sold over the trailing 12 months was 6.4%, ranging from 5.0% to 7.6%. Quality, well-leased buildings trade at the lower end.
How much office space sold in Coeur d’Alene over the past year?
About $16.8 million of office property traded over the trailing 12 months across 24 transactions — above the five-year ($12.7M) and ten-year ($11.0M) averages. The largest sale was the $9.5 million Mineral Drive Office building in Hayden.
Why is Coeur d’Alene office doing better than the national market?
Coeur d’Alene has almost no new office construction and zero high-rise inventory, so it never developed the oversupply that drives high vacancy elsewhere. Combined with strong in-migration and growing medical and education employment, that keeps vacancy structurally low.
What is the 2026 forecast for the Coeur d’Alene office market?
Vacancy is expected to hold near 4.0% through 2026, with rent growth modest in the near term (under 1%) before potentially reaccelerating in 2027. Cap rates are likely to stay elevated given higher-for-longer interest rates, though scarce quality product will continue to trade tight.
Coeur d’Alene Office Real Estate Broker — Eric Peterson, ACTIV8 Real Estate, LLC
Eric Peterson is the Designated Broker and President of ACTIV8 Real Estate, LLC, based in Liberty Lake, Washington, serving the Inland Northwest and North Idaho commercial real estate markets. ACTIV8 provides market research, broker opinions of value, and acquisition, disposition, and leasing advisory across the office, retail, industrial, and multifamily sectors in Coeur d’Alene, Post Falls, Hayden, Spokane, and the surrounding region.
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Whether you own office property and want to know what it’s worth in today’s market, or you’re a business weighing whether to buy instead of lease, Eric Peterson provides data-driven analysis backed by on-the-ground Coeur d’Alene and Inland Northwest expertise — including a complimentary broker opinion of value.
Eric Peterson | 509-255-3476 | [email protected] | ACTIV8RE.com
