Coeur d’Alene Office Real Estate Outlook – Q1 2025 Vacancy, Rent Trends, and Investment Insights

The Coeur d’Alene office market remained stable through the first quarter of 2025, showing resilience despite elevated vacancies and a cautious leasing environment. As the regional economy continues to expand, demand is shifting toward smaller, flexible workspaces and professional service users. Here’s how the market is shaping up this year.

Data sourced from CoStar, Crexi, broker-reported activity, and publicly available information as of April 2025.

Don’t want to read? Watch the Q1 2025 Coeur d’Alene / Kootenai County Office report here:

Market Snapshot – Q1 2025

Vacancy Holds Steady

Vacancy held at 5.6% in Q1 2025, slightly above the five-year average of 3.8% but stable compared to the end of 2024. The Coeur d’Alene market remains one of the tightest in the Inland Northwest, with no large-scale tenant move-outs or new vacancies reported. Submarkets like Post Falls and South Coeur d’Alene are performing well, while larger floor plates remain slower to lease.

Tenant Demand and Rent Trends

Professional services, health and wellness providers, and remote-work-driven businesses continue to drive the bulk of leasing activity. Most new leases are under 3,000 SF. The average asking rent market-wide is $20.04/SF full service, with 4 & 5 Star buildings achieving $24–$26/SF depending on location. Rent growth has flattened, posting just 0.2% year-over-year, but landlords are maintaining face rates through concessions and shorter-term leases.

Office Space by Type

• Specialized Office: $21.71/SF | 2.5% Vacancy
• General Office: $19.82/SF | 6.0% Vacancy
• Medical Office: $23.19/SF | 5.2% Vacancy

Flex spaces and smaller suites remain in high demand, while Class B and older buildings without modern buildouts are facing longer lease-up timelines.

No New Construction

No new office projects are currently under construction in Kootenai County. The market delivered 27,856 SF in the past 12 months but is taking a cautious stance going forward. With leasing velocity moderate and buildout costs remaining high, most developers are holding off on speculative builds. This lack of new supply could benefit existing landlords by reducing competition for high-credit tenants.

Office Investment Activity

Sales activity was light in Q1, with pricing averaging $152/SF and cap rates in the 6.5%–7.0% range. Owner-user demand remains strong, especially for buildings under $2 million in central locations. Office condos in Hayden and central Coeur d’Alene continue to trade among small business buyers. The absence of large institutional trades reflects a broader trend of investors favoring stability and yield over risk and scale in tertiary office markets.

Market Outlook

The Coeur d’Alene office real estate market is well-positioned for gradual recovery. With no new speculative construction, a growing professional base, and continued population growth in Kootenai County, we anticipate a slow but steady tightening in vacancy by mid-2026. Tenants will continue to seek flexible lease structures, turnkey suites, and well-located buildings. Landlords who are investing in modern buildouts and professional management are best positioned to capture this demand.

Need Help With Office Leasing or Tenant Representation?

At ACTIV8 Real Estate, we specialize in helping business owners and property investors navigate office leasing in Spokane, Coeur d’Alene and Post Falls. Whether you’re a landlord filling vacancy or a business evaluating space for the next phase of growth, we offer end-to-end strategy, marketing, and negotiation support. From lease analysis and financial modeling to space tours and listings, our team brings decades of Inland Northwest market experience to every deal.

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📩 For a personalized office leasing strategy, contact Eric Peterson at [email protected] or call (509) 903.9077.