Spokane Office Market Report Q1 2026

The Spokane office market opens 2026 with 7.6% vacancy — less than half the 19% U.S. national average — but the headline obscures a sharply bifurcated market: South Hill at 2.6%, Spokane Valley at 7.4%, West Plains at 5.8%, and the Spokane CBD at 11.3%. Asking rents average $21.52/SF, stabilized investment cap rates trade at 6.4%–7.5%, and 12-month sales volume totaled $65.1M across 45 transactions.

The Spokane office market opened 2026 with a 7.6% headline vacancy rate — less than half the 19% U.S. national average and a fraction of the 30%+ vacancy seen in major coastal markets like San Francisco and Seattle. But that 7.6% figure obscures more than it reveals: the Spokane office market is sharply bifurcated, and treating the headline number as a single market signal will mislead any owner, tenant, or investor making decisions in 2026.

Suburban Spokane office is genuinely tight. South Hill carries just 2.6% vacancy, the Valley sits at 7.4% with the deepest transaction liquidity in the region (anchored by the upcoming F5 Building delivery), and the West Plains is at 5.8% with the F5 Networks build-to-suit and Aerospace Tech Hub poised to drive H2 2026 absorption. The Spokane CBD is a different story — 11.3% vacancy, distressed Class B/C product trading at $22 per square foot (RenCorp’s recent purchase of 111 N Wall Street), and a slow grind of repositioning that will define the downtown narrative through this cycle. Understanding which submarket your asset, your prospect, or your acquisition target sits in is the entire game in Spokane office in 2026.

Key Statistics — Spokane Office | Q1 2026

• Market Vacancy: 7.6% (vs. 19% national average · 30%+ in coastal markets)
• Submarket Spread: South Hill 2.6% · Valley 7.4% · West Plains 5.8% · CBD 11.3%
• Market Asking Rent: $21.52/SF · 0.7% YOY growth · 33.6% cumulative 10-year growth (vs. 18% national)
• 12-Month Sales Volume: $65.1M · 45 transactions (vs. $102M five-year average)
• Cap Rates: 6.4–7.5% on stabilized investment-grade transactions · 10.2% CoStar model rate
• Total Inventory: 24.2M SF across CBD, Valley, North, South Hill, West Plains, University District
• New Construction: F5 Building (57,000 SF, 100% preleased, May 2026 delivery)
• CBD Distress Signal: RenCorp acquired 111 N Wall Street (102,132 SF) at $22/SF

Spokane Office Market Overview — Q1 2026

Spokane’s 24.2 million square feet of office inventory is essentially unchanged from a decade ago. Conversions of older buildings, outright demolitions, and a nearly complete absence of speculative new construction have kept a tight lid on supply that virtually no other market in the Western United States can match. That structural discipline — also evident in our Spokane Retail Market Report Q1 2026 — is the single biggest reason vacancy sits at 7.6% while comparable Western markets are struggling.

The one building under construction in the entire Spokane market is the F5 Building at 12511 E Pinecroft Way in the Valley submarket — a 57,000-square-foot build-to-suit for F5 Networks, 100% preleased, scheduled to deliver May 2026. In a 24.2-million-square-foot market, that is 0.2% of inventory. The pipeline is a tailwind, not a headwind.

Leasing activity over the trailing 12 months totaled close to 1 million square feet, led by medical, professional services, and education users. Notable deals include F5’s 57,000-square-foot anchor lease, a 41,727-square-foot renewal by Northwest Orthopaedic Specialists at Spokane Integrated Medical Plaza on South Hill, and a 40,000-square-foot lease at 3900 E Sprague Ave in the SE North Metro corridor.

Market asking rents average $21.52 per square foot — essentially flat year-over-year at +0.7%, but grounded by Spokane’s 10-year cumulative outperformance of +33.6% versus +18.0% nationally. Class A commands $27.59 per square foot; Class B runs $23.02; Class C averages $19.60. South Hill leads at $23.92 per square foot, while West Plains shows the fastest rent growth at +1.4%.

The 12-month net absorption of negative 10,180 square feet reflects modest tenant contraction in older Class B and C buildings, while Class A and newer 3-Star product absorbs positively. South Hill led at +23,333 square feet. The Valley added +21,767 square feet. The Spokane CBD posted +19,469 square feet of positive absorption despite 11.3% vacancy, as repositioning activity and new leasing offset move-outs.

Spokane Office Vacancy, Rents & Absorption — Q1 2026

South Hill carries just 2.6% vacancy — the tightest in the market — paired with the highest asking rents at $23.92 per square foot and net absorption of +23,333 square feet. Providence and MultiCare anchor this corridor. The healthcare ecosystem here is self-reinforcing, making it the most durable submarket in the Inland Northwest.

The Valley — Spokane’s largest submarket at 24.8% of total inventory — shows balanced fundamentals: 7.4% vacancy, $21.43 per square foot, and +21,767 square feet of absorption. The F5 Building delivery in May 2026 adds a meaningful block of preleased occupied space. At $20.2 million in trailing 12-month sales volume, the Valley is also the most liquid transaction submarket in the region.

The Spokane CBD carries 11.3% vacancy but posted positive absorption of +19,469 square feet. RenCorp’s $2.27 million ($22 per square foot) acquisition of 102,132-square-foot 111 N Wall Street signals that distressed CBD product is attracting repositioning capital at the right price.

The SE North Metro corridor posted the market’s weakest absorption at negative 84,702 square feet as tenants consolidate out of older Class B product. West Plains is tight at 5.8% vacancy but ran negative absorption — a timing effect the F5 Building and Aerospace Tech Hub activity should begin reversing in the second half of 2026.

Office Property Sales in Spokane — Recent Transactions

Forty-five office transactions closed over the trailing 12 months totaling $65.1 million — well below the five-year average of $102 million, reflecting elevated borrowing costs and limited institutional appetite for the office sector nationally.

The critical context: owner-user purchases have dominated recent volume and are distorting the reported average transaction cap rate of 7.1%. Washington State University’s $8.25 million purchase of the WSU Innovation Center ($211 per square foot) and the Spokane School District’s $12.2 million acquisition of Riverpoint One were both owner-user deals with no cap rate. Do not use these prices to benchmark investment-grade asset acquisitions.

For investment underwriting, use the pure investment comps: 11919 Sunset (West Plains, $7.5M, 6.4% cap, 100% leased, 1031 exchange); 14408 E Sprague Avenue (Valley, $5.72M, 7.5% cap, NNN); 5615 W Sunset Highway ($6.1M, 7.5% cap, NNN). Investment-grade stabilized assets in the Spokane office market are trading at 6.4-7.5% cap rates. Buyer composition: 88% local, 12% national — institutional capital is sidelined.

Office Cap Rates & Investment Activity — Inland Northwest

The Federal Reserve held rates at 3.50-3.75% at its March 2026 meeting. The 10-year Treasury stands at 4.31% as of early April 2026. Lenders are requiring 1.20-1.25x DSCR on current net effective rents with no pro-forma credit. LTV availability: 60-65% for stabilized office. CoStar’s market model cap rate: 10.2%. Transaction cap rates for stabilized quality assets: 6.4-7.5%.

Life company capital is actively deployed in 2026 for well-tenanted stabilized assets. CMBS remains selective on office outside gateway markets. The Fed dot plot projects one cut in Q4 2026 — if delivered, the second half of the year could see a meaningful uptick in transaction activity as buyers waiting for better entry timing begin to move.

Inland Northwest Office Market Forecast — 2026

The structural case for the Spokane office market remains intact: constrained supply, in-person tenant base, historically higher cap rates, and a growing regional economy. CoStar’s forward model projects modest positive absorption for full-year 2026, with vacancy stabilizing near current levels before tightening through 2027-2028. Rent growth is forecast to recover from 0.7% currently to approximately 2.4% annually by 2030.

Key risks: Class A vacancy at 16.2% signals demand softness even in best-in-class product, and federal Medicaid policy is the primary economic risk given healthcare’s one-in-five share of regional employment. Key upside: the Spokane Aerospace Tech Hub — Senate-approved up to $70 million for ~50 advanced manufacturing companies — would drive demand for R&D and small office product in West Plains and the University District.

For property owners: quality assets in the Spokane office market are unlikely to reprice meaningfully lower from here. (For comparable analysis on the industrial side, see our Spokane Industrial Market Report Q1 2026.) The supply discipline, durable tenant demand, and historically higher cap rates create a window for acquisition at current terms that may close as activity picks up in H2 2026.

What This Means If You’re Considering Selling Your Spokane Office Property

The Q1 2026 data tells a more nuanced story for Spokane office sellers than a single market headline can capture. Four submarket-specific dynamics matter:

1. South Hill owners hold the strongest position in the market. At 2.6% vacancy with the highest asking rents in the metro ($23.92/SF) and a healthcare tenant base anchored by Providence and MultiCare, South Hill office assets are the most durable, lowest-risk product in the Inland Northwest. For owners of stabilized, well-leased medical office or professional office buildings in this corridor, pricing is at or near peak for this cycle.

2. Spokane Valley owners benefit from the deepest buyer pool. The Valley accounts for the largest share of trailing-12-month sales volume in the market ($20.2M). The F5 Building delivery in May 2026 — 57,000 SF, 100% preleased to F5 Networks — reinforces investor conviction in the submarket. Quality stabilized assets in the Valley have a real buyer audience right now in the $1M–$8M range.

3. West Plains owners should monitor the H2 2026 catalyst. West Plains is tight at 5.8% vacancy, but the bigger story is the Aerospace Tech Hub — Senate-approved up to $70 million for ~50 advanced manufacturing companies. If activity materializes as projected, the second half of 2026 could shift West Plains office demand meaningfully. Owners of small-to-mid office product positioned for R&D or tech tenants should evaluate timing carefully.

4. CBD owners face the longest road and the most strategic decisions. At 11.3% vacancy with distressed Class B/C product trading at $22/SF (RenCorp’s 111 N Wall Street acquisition), the CBD is a repositioning market, not a stabilized-pricing market. Sellers here have two viable paths: bring a stabilized, well-leased asset to a smaller buyer pool willing to pay for quality, or sell at land/redevelopment basis to capital actively repositioning downtown product.

The broader pricing window is defined by the rate environment. The Fed’s dot plot projects one cut in Q4 2026. When rate cuts arrive, sidelined institutional buyers re-enter the market and the current 88% local / 12% national buyer composition shifts toward more competitive pricing dynamics. Owners considering a 12–18 month sale horizon should be evaluating the market now, while the buyer composition still favors private-capital decisiveness over institutional underwriting discipline.

If you own Spokane office property — in any submarket — the most useful next step is a current broker opinion of value: a specific, property-level read on what your asset would command from today’s buyer pool, with submarket-adjusted pricing and a defensible exit timeline. ACTIV8 prepares these as a free, no-obligation service for property owners.

Request a Free Valuation of Your Spokane Office Property

Find out what your office property is worth in the current market. ACTIV8 prepares custom broker opinions of value for office owners across South Hill, Spokane Valley, the Spokane CBD, West Plains, and the broader Inland Northwest — using the same CoStar data, transaction comps, and submarket intelligence that drives this quarterly report.

What you get:

• Current market-based valuation range for your specific property
• Submarket-adjusted comparable sale analysis from the last 24 months
• Buyer-pool assessment for your asset class and price point
• Strategic recommendations on timing, lease structure, and positioning

No cost. No obligation. Confidential.

Or contact Eric Peterson directly: 509-903-9077 | [email protected]

Frequently Asked Questions: Spokane Office Market

What is the office vacancy rate in Spokane in Q1 2026?

The Spokane office market vacancy rate is 7.6% in Q1 2026 — less than half the 19% U.S. national average. The headline figure hides significant submarket bifurcation: South Hill is at 2.6% vacancy, the Spokane Valley at 7.4%, West Plains at 5.8%, and the Spokane CBD at 11.3%. Class A vacancy across the market is 16.2%, signaling demand softness in best-in-class product even as overall fundamentals hold.

Is downtown Spokane office struggling?

The Spokane CBD is the weakest submarket in the metro at 11.3% vacancy, but it is not in collapse. The CBD posted positive net absorption of +19,469 SF over the trailing 12 months, and distressed Class B/C product is attracting repositioning capital — most notably RenCorp’s $2.27 million acquisition of the 102,132 SF building at 111 N Wall Street, a basis of just $22 per square foot. Downtown is a repositioning market, not a freefall.

What are office cap rates in Spokane in 2026?

Stabilized, well-leased Spokane office assets are trading at 6.4%–7.5% cap rates as of Q1 2026, with the West Plains example of 11919 Sunset closing at $7.5M and a 6.4% cap and Valley investment sales clearing at 7.5%. CoStar’s market model cap rate of 10.2% is significantly higher than transaction reality because it weights the broader inventory including distressed and Class C product. For institutional-quality stabilized assets in core submarkets, expect pricing in the high-6% to mid-7% range.

What is the asking rent for office space in Spokane?

Market asking rent across the Spokane office market averages $21.52 per square foot in Q1 2026, up 0.7% year-over-year. Class A commands $27.59/SF, Class B runs $23.02/SF, and Class C averages $19.60/SF. South Hill leads at $23.92/SF (the highest in the market) while West Plains shows the fastest rent growth at +1.4% year-over-year. Over the past decade, Spokane office rents have grown 33.6% cumulatively — significantly outpacing the 18% national average.

Is Spokane a good market to buy office real estate in 2026?

The Spokane office market offers a compelling combination for office investors in 2026: constrained supply (one building under construction in the entire 24.2M SF market), strong submarket fundamentals (sub-6% vacancy in South Hill and West Plains), and higher cap rates than gateway markets (6.4%–7.5% on stabilized assets versus 5.5%–6.5% in comparable suburban markets). The 88% local buyer composition means competitive pressure from institutional capital is limited, creating an acquisition window for well-capitalized private investors. The Federal Reserve’s projected Q4 2026 rate cut is the catalyst to watch.

This report is published for informational purposes only. It reflects market conditions and broker commentary as of the report date and does not constitute investment, legal, or tax advice. Property-specific decisions should be made in consultation with qualified professionals. ACTIV8 Real Estate, LLC is a licensed commercial brokerage in Washington and Idaho.

Spokane 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. Eric advises commercial real estate owners, investors, and tenants across Eastern Washington and North Idaho, covering office, retail, industrial, and investment property throughout the Inland Northwest.

ACTIV8 produces quarterly and annual market reports for Spokane and Coeur d’Alene across all four commercial property types, combining CoStar data with direct field intelligence to give clients a ground-level view of what the market is actually doing.

Data: CoStar | Q1 2026 | ACTIV8 Real Estate, LLC | [email protected] | 509-903-9077 | ACTIV8RE.com