Spokane Industrial Market Report — Q2 2026
Spokane’s industrial vacancy rate was 6.1% in Q2 2026, up roughly 20 basis points year over year but still below the 7.5% U.S. industrial average (CoStar). Market asking rent averaged about $9.59/SF, up 1.3% year over year — down from 2.6% growth a year earlier. The market cap rate held near 8.1%, with trailing-12-month sales volume of $98.3 million across 68 transactions. Trailing-12-month net absorption was slightly negative at about −31,000 SF, and flex vacancy climbed to 15.3% even as specialized industrial stayed tight at 2.3%. ACTIV8 Real Estate forecasts Spokane industrial vacancy near 6.7% by year-end 2026 as rent growth slows to about 0.6%.
Spokane Industrial Key Statistics — Q2 2026
| Metric | Q2 2026 | Detail |
|---|---|---|
| Industrial vacancy rate | 6.1% | Up ~20 bps YoY; below the 7.5% U.S. average |
| Average asking rent | $9.59/sf | +1.3% year over year |
| Market cap rate | 8.1% | Flat QoQ and YoY; ~$104/sf sale price |
| Trailing 12-mo sales volume | $98.3M | Across 68 trades; +28% YoY |
| Tightest subtype | Specialized — 2.3% | Logistics 7.2% |
| Under construction | ~402,000 sf | ~0.7% of inventory; 78.6% pre-leased |
Spokane Industrial Market Overview — Q2 2026
Spokane’s industrial market closed the second quarter of 2026 looking healthier than the national picture on the surface, even as its underlying momentum cooled. Metro vacancy stood at roughly 6.1% — up about 20 basis points from a year earlier, but still well below the 7.5% national industrial vacancy rate reported by CoStar. Yet the market gave back roughly 31,000 square feet on a trailing-twelve-month basis, and asking-rent growth slowed to 1.3%, down from 2.6% a year ago. The metro’s roughly 56.8 million square feet of inventory anchors eastern Washington and the broader Inland Northwest as a regional distribution hub. After building modern capacity aggressively last cycle, Spokane is now digesting that space against a slower-growing tenant base: over the past five years the market delivered about 5.1 million square feet while absorbing about 3.2 million — the gap that explains today’s soft-but-stable readings.
SPK Industrial Vacancy, Rents & Absorption — Q2 2026
The most important thing the 6.1% metro average hides is how differently the three industrial subtypes are performing. Specialized industrial is effectively full at 2.3% vacancy; logistics is a manageable 7.2% as it works through the last cycle’s big-box deliveries; and flex vacancy has climbed to 15.3%, with year-to-date flex absorption running about negative 331,000 square feet — a genuine distress pocket inside an otherwise stable market. Market asking rent averaged about $9.59 per square foot, a steep discount to the roughly $12.20 national benchmark and a core reason tenants priced out of coastal markets keep looking inland. New, modern small-bay flex, by contrast, has leased near $16 per square foot — the clearest sign of a flight to quality that rewards functional, well-powered space and leaves older commodity product behind.
Industrial Property Sales in Spokane — Recent Transactions
Investment activity told a steadier story than leasing. Trailing-twelve-month sales volume reached $98.3 million across 68 trades — down modestly from the prior quarter, but up nearly 28% year over year; for context, 2025 closed near $125 million, its third-strongest year on record. This is a small-deal market: the average trade was under 20,000 square feet at about $119 per square foot, nearly half of transactions were under $1 million, and almost all were under $10 million. The quarter’s largest sale was a 73,500-square-foot Spokane Valley building that traded in June for $11.2 million ($152 per square foot) at a 6.7% cap rate on a sale-leaseback. Owner-users stayed active on the small-bay side — one local HVAC company bought the roughly 22,000-square-foot building it already occupied for $3.6 million ($162 per square foot). That cash- or SBA-financed owner-user demand keeps Spokane’s transaction count resilient even with borrowing costs elevated.
With Spokane industrial cap rates holding near 8.1% and specialized space effectively full at 2.3% vacancy, well-located buildings are pricing firmly. Want to know what your industrial property is worth in today’s market?
Industrial Cap Rates & Investment Activity — Inland Northwest
Pricing has been notably stable. The Spokane market cap rate held near 8.1% — essentially flat both quarter over quarter and year over year — while market sale price per square foot rose about 4.3% year over year to roughly $104. Recent trades generally cleared in the high-6% to low-7% cap range, with closing prices landing about 10% below initial asking, a sign buyers still have room to negotiate. The buyer mix is the tell: national investors now make up close to 60% of purchasers and about 71% of dollar volume, surpassing local buyers, while institutional capital — a small share of deal count but nearly a quarter of volume — has concentrated in the Valley. Out-of-market money is underwriting Spokane’s low headline vacancy and its in-migration story rather than this quarter’s soft absorption — the capital-confidence-versus-fundamentals gap that defines the quarter.
Inland Northwest Industrial Market Forecast — 2026
Looking ahead, the thin construction pipeline is doing quiet, important work. Only about 402,000 square feet is under construction — roughly 0.7% of inventory — and it is 78.6% preleased, down sharply from the 2.2-million-square-foot peak in 2021. CoStar’s forecast has metro vacancy drifting up to about 6.7% by year-end 2026 before the light pipeline lets the market re-tighten in 2027 and beyond, with rent growth troughing near 0.6% this year before reaccelerating. The rate backdrop reinforces the stability: with the Fed on hold at 3.50%–3.75% and the 10-year Treasury near 4.49%, debt costs are no longer compressing — which is exactly why cap rates have held rather than fallen. The bigger risk to watch is a further pullback in goods-producing or distribution employment; the support is continued in-migration and Spokane’s structural cost advantage over Seattle and other coastal markets. On balance, this reads like a market defined by durability and incremental grind rather than a downturn.
What Q2 2026 Means If You Own Spokane Industrial Property
If you own Spokane industrial property, the numbers favor well-located, functional space. At an 8.1% market cap rate, every $10,000 of net operating income is worth roughly $123,000 in value. With overall vacancy at 6.1% — still below the 7.5% national average — and specialized space effectively full at 2.3%, quality buildings are holding value, and pricing has stayed stable near $104 per square foot.
- 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? Firm pricing is a good moment to review property management and lease structure.
- Have space to fill? See how our leasing team positions Spokane industrial space.
- Compare your asset class: office, retail, and multifamily.
Spokane Industrial Market — Frequently Asked Questions
What is the Spokane industrial vacancy rate in Q2 2026?
Spokane’s industrial vacancy rate was about 6.1% in Q2 2026, up roughly 20 basis points year over year but still below the 7.5% U.S. industrial average (CoStar). By subtype, specialized industrial was tight at 2.3%, logistics was 7.2%, and flex vacancy was elevated at 15.3%.
Are Spokane industrial rents rising or falling?
Spokane industrial asking rents were still rising in Q2 2026, but slowly — up 1.3% year over year to about $9.59 per square foot, down from 2.6% growth a year earlier. ACTIV8 expects rent growth to slow to roughly 0.6% for full-year 2026, a sharper deceleration than the national market.
What are cap rates for industrial property in Spokane?
The Spokane industrial market cap rate held near 8.1% in Q2 2026, essentially flat year over year. Recent transactions generally traded in the high-6% to low-7% cap range, with closing prices about 10% below initial asking (CoStar).
What’s the 2026 forecast for the Spokane industrial market?
CoStar forecasts Spokane industrial vacancy rising to about 6.7% by year-end 2026, with rent growth near 0.6%, before a thin construction pipeline allows the market to re-tighten in 2027. Only about 402,000 square feet is under construction, roughly 79% preleased.
Which Spokane submarket has the most industrial activity?
The Spokane Valley is the most active submarket, accounting for about $67 million of trailing-12-month sales volume across 31 trades at an 8.1% cap rate. West Plains posted the strongest 12-month absorption (about +46,000 SF) but also carries the highest vacancy at 19.4% after large logistics deliveries.
How much industrial space is under construction in Spokane?
About 402,000 square feet of industrial space was under construction in Spokane as of Q2 2026 — roughly 0.7% of the 56.8-million-square-foot inventory — and 78.6% of it was preleased. Key projects include King Beverage’s 205,000 SF build in West Plains (completing October 2026) and the 86,000 SF Barker Logistics Center (December 2026).
Spokane Industrial Real Estate Broker — Eric Peterson, ACTIV8 Real Estate, LLC
Eric Peterson is the President and Designated Broker of ACTIV8 Real Estate, LLC, based in Liberty Lake, Washington, serving Spokane, the Inland Northwest, and North Idaho commercial markets. Eric produces ACTIV8’s quarterly and annual market reports across retail, office, industrial, and multifamily, and advises owners, investors, and business tenants on acquisitions, dispositions, leasing, and broker opinions of value. This report reflects CoStar data as of July 2, 2026, combined with ACTIV8’s on-the-ground read of the Spokane industrial market.
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Eric Peterson | 509-255-3476 | [email protected] | ACTIV8RE.com
