Spokane Retail Market Report — Q2 2026
Spokane’s retail vacancy rate was 5.3% in Q2 2026, down from 5.4% the prior quarter and essentially flat year over year, according to CoStar data analyzed by ACTIV8 Real Estate. The market’s average asking rent reached $16.79 per square foot, up 1.0% year over year, while trailing-12-month net absorption was negative 111,000 square feet — driven almost entirely by a single 146,000-square-foot former Burlington converting to self-storage. The Spokane retail market cap rate held at 7.4%, with 12-month sales volume of $107 million across 138 transactions. With only about 49,000 square feet under construction — well below the market’s decade average — CoStar forecasts vacancy easing toward 5.1% and asking-rent growth reaccelerating toward 2.4% by 2027.
Spokane Retail Key Statistics — Q2 2026
| Metric | Q2 2026 | Detail |
|---|---|---|
| Retail vacancy rate | 5.3% | Down from 5.4% prior quarter; ~90 bps above U.S. (~4.4%) |
| Average asking rent | $16.79/sf | +1.0% year over year |
| Market cap rate | 7.4% | Stabilized multi-tenant in mid-6% to low-7% range |
| Trailing 12-mo sales volume | $107M | Across 138 transactions |
| Private-investor share | 92% | Of buyer volume |
| 2027 outlook | Vacancy ~5.1% | Rent growth reaccelerating toward 2.4% |
Spokane Retail Market Overview — Q2 2026
The Spokane retail market closed the second quarter of 2026 at a 5.3% vacancy rate, and the direction of travel matters more than the headline. Vacancy actually declined from 5.4% in the first quarter and sits essentially flat against a year ago — a market that has stopped deteriorating and quietly begun to firm after the store-closure wave of 2025. The single most important driver of the year’s softness was not weak demand but one large conversion: a 146,000-square-foot former Burlington became a self-storage facility after the retailer downsized within the same center. Together with footprint reductions from the national Rite Aid, JOANN, and Big Lots bankruptcies, that accounts for nearly all of the roughly 111,000 square feet of negative net absorption recorded over the trailing twelve months.
Spokane’s 5.3% vacancy runs about 90 basis points above the roughly 4.4% national retail average, reflecting those idiosyncratic move-outs rather than a structural gap. The reassuring counterweight is supply: with almost no new construction underway, there is little competitive space to slow the re-tenanting of what has come back to market.
SPK Retail Vacancy, Rents & Absorption — Q2 2026
Average asking rent reached $16.79 per square foot in Q2 2026, up 1.0% year over year. That is a sharp deceleration from the 4.3% peak growth of 2023 and trails the national pace, but it is a plateau rather than a decline — and with construction near historic lows, there is little to pull rents down. Beneath the market average, conditions vary widely by format: general retail (4.5% vacancy) and malls (3.1%) remain tight, while neighborhood and strip centers run near 8.1%. The submarket spread is even wider, from the Valley’s 2.7% to South Hill’s 12.4%.
The submarket table below details vacancy, trailing-12-month net absorption, asking rent, and market cap rate across Spokane’s primary retail submarkets.
Retail Property Sales in Spokane — Recent Transactions
Investment activity in Spokane retail is local and patient. Trailing 12-month sales volume was about $107 million across 138 transactions, below the five-year average of $163 million, at a 7.4% market cap rate. Private investors accounted for 92% of buyer volume, consistent with Spokane’s largely sub-$5 million, relationship-driven market. The headline trade was the three-property Town & Country Center portfolio in NW North Metro, which sold in January 2026 for $11 million — roughly $270 per square foot at a 7.33% going-in cap rate. At the opposite end, a 2025-built net-leased pad on N Newport Highway traded near $1,293 per square foot at a 4.6% cap rate, illustrating the premium buyers pay for credit-tenant income. Stejer Development was the market’s largest seller at nearly $26 million across 29 transactions.
With Spokane retail cap rates holding at 7.4% and vacancy tightening to 5.3%, well-located multi-tenant centers are trading at a premium. Want to know what your retail property is worth in today’s market?
Retail Cap Rates & Investment Activity — Inland Northwest
The Spokane retail market cap rate held at 7.4% in Q2 2026, with stabilized, well-located multi-tenant assets trading in the mid-6% to low-7% range and older or weaker-credit properties pricing to higher yields. By submarket, cap rates ranged from about 7.2% in the Spokane CBD to 7.7% in NE North Metro. The rate backdrop remains a headwind: the Federal Reserve held its benchmark at 3.50–3.75% in June 2026 and signaled a possible hike, keeping the 10-year Treasury near 4.5%. Even so, credit conditions are gradually improving as lenders re-enter commercial real estate. In a market like Spokane’s, the binding constraint on deal flow is less the availability of debt than the gap between sellers anchored to peak-cycle pricing and buyers underwriting to 7%-plus yields; deals are closing about 6% below asking.
Inland Northwest Retail Market Forecast — 2026
CoStar’s model has Spokane retail vacancy easing toward 5.1% by 2027 and asking-rent growth reaccelerating toward 2.4%, supported by a construction pipeline well below the market’s roughly 130,000-square-foot decade average. As the one-time move-outs re-tenant against that limited supply, occupancy should firm. Sales volume is expected to stay steady but measured, gated more by the supply of stabilized product and price alignment than by capital availability. The regional context is worth watching: across the state line, North Idaho and Coeur d’Alene remain among the fastest-growing metros in the country, meaning retail demand drivers are building faster east of Spokane than within it. The takeaway is cautious optimism — a stabilizing market that rewards well-located product and disciplined underwriting.
What Q2 2026 Means If You Own Spokane Retail Property
If you own Spokane retail property, the numbers point to a stable, income-driven market. At a 7.4% market cap rate, every $10,000 of net operating income is worth roughly $135,000 in value — so occupancy and credit quality are what a buyer prices. With vacancy at 5.3% (down from 5.4% and tighter than it looks against almost no new construction), well-located multi-tenant centers are trading in the mid-6% to low-7% range, while weaker-credit properties price to higher yields.
- Thinking about selling? Start with a broker opinion of value to see where your center prices today, then our seller representation team runs the process.
- Holding for income? Tight occupancy is a good moment to review property management and lease structure.
- Have space to fill? See how our leasing team positions Spokane retail space.
- Compare your asset class: office, industrial, and multifamily.
Spokane Retail Market — Frequently Asked Questions
What is the Spokane retail vacancy rate in Q2 2026?
Spokane’s retail vacancy rate was 5.3% in Q2 2026, down from 5.4% in Q1 2026 and roughly flat year over year. That is about 90 basis points above the ~4.4% U.S. retail average. CoStar forecasts vacancy easing toward 5.1% into 2027.
Are Spokane retail rents rising or falling?
Spokane retail asking rents are rising modestly — up 1.0% year over year to $16.79 per square foot in Q2 2026. That is a plateau after the 4.3% peak growth of 2023 and trails the ~1.7% national pace. With little new construction, rents are projected to reaccelerate toward 2.4% by 2027.
What are cap rates for retail in Spokane?
The Spokane retail market cap rate was 7.4% in Q2 2026. Stabilized, well-located multi-tenant assets traded in the mid-6% to low-7% range, while older or weaker-credit properties priced to higher yields. By submarket, cap rates ranged from about 7.2% (Spokane CBD) to 7.7% (NE North Metro).
Why did Spokane retail net absorption turn negative?
Spokane retail recorded roughly 111,000 square feet of negative net absorption over the trailing 12 months, but nearly all of it came from a single 146,000-square-foot former Burlington that converted to self-storage. Footprint reductions from the Rite Aid, JOANN, and Big Lots bankruptcies added to it. This reflects a handful of large, identifiable move-outs rather than a broad decline in demand.
Which Spokane submarket is strongest for retail?
The Valley is Spokane’s strongest retail submarket, with the lowest vacancy at 2.7%, positive 12-month absorption of about 117,000 square feet, and the most sales activity in the metro. South Hill has the highest vacancy at 12.4% but also the highest asking rents at $22.73 per square foot.
What is the 2026–2027 forecast for the Spokane retail market?
CoStar forecasts Spokane retail vacancy easing toward 5.1% by 2027 and asking-rent growth reaccelerating toward 2.4%, supported by a construction pipeline well below the market’s decade average. Sales volume is expected to stay steady but measured, gated more by the supply of stabilized product and price alignment than by capital availability.
Spokane Retail Real Estate Broker — Eric Peterson, ACTIV8 Real Estate, LLC
Eric Peterson is the President and Designated Broker of ACTIV8 Real Estate, LLC, a commercial real estate brokerage based in Liberty Lake, Washington, serving Spokane and the North Idaho / Inland Northwest market. He specializes in retail, office, industrial, and multifamily brokerage, investment sales, and market analysis, and provides broker opinions of value for owners weighing a sale or refinance. Eric publishes quarterly and annual market reports across the region’s core property types.
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Contact Eric Peterson, Designated Broker — 509-255-3476 · [email protected] · ACTIV8RE.com.
