Spokane Retail Real Estate Market Report – Q1 2025 Trends, Vacancy, and Construction
The Spokane retail real estate market held steady in the first quarter of 2025, showing modest rent growth, balanced availability, and limited new development. As retailers adjust to shifting consumer behavior and slowing retail sales, Spokane’s relative affordability and stable fundamentals continue to attract both tenants and investors.
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 Spokane Retail report here:
Availability and Leasing Trends
Spokane’s retail space for lease rate sits at 4.7%, slightly above its five-year average of 4.2% and in line with the national average (4.8%). The market saw 12-month net absorption of 383,000 SF, a solid performance following a sharp dip in 2024.
Strip centers showed the weakest leasing activity, while power centers and general retail categories absorbed more space. A notable contributor to net absorption was Southgate Shopping Center on the South Hill, which leased over 32,000 SF in the past year.
Rent Growth by Property Type
Market-wide asking rent increased by 2.4% year-over-year, outperforming the national average of 1.8%. Power centers led with a 4.1% gain, while strip centers saw the slowest growth.
| Property Type | Average Asking Rent | YoY Rent Growth |
|---|---|---|
| Power Center | $18.63/SF | +4.1% |
| General Retail | $16.30/SF | +3.7% |
| Neighborhood Center | $17.66/SF | +3.0% |
| Strip Center | $17.41/SF | +1.5% |
| Mall (no new leases) | $21.90/SF | +2.9% |
Over the past 10 years, Spokane rents have increased by 34.7%, outpacing the national average of 32.6%.
Construction Spotlight: Spokane Retail Pipeline
Retail development remains limited, with only 139,000 SF under construction, representing just 0.4% of total inventory. All current projects are 100% pre-leased, reflecting Spokane’s measured and demand-driven approach to development in a higher interest rate environment.
Major Retail Projects Underway:
- 🏗 Home Depot – 4515 S Regal St | 107,900 SF | Completion: June 2025
- 🏪 Sierra – 13814 E Indiana Ave | 18,942 SF | Completion: May 2025
- 🏬 Retail – 13914 E Indiana Ave | 6,512 SF | Completion: June 2025
- 🏦 Central Idaho Credit Union – 3065 E 30th Ave | 5,600 SF | Completion: June 2025
These projects reinforce Spokane’s trend of tenant-preferred, custom-built sites—especially for large-format national users seeking visibility and accessibility in corridors like South Hill and East Indiana Avenue.
With so little speculative development in the pipeline, availability will remain tight—particularly for smaller retail users seeking modern storefronts or pad sites. This will likely continue to support retail rent stability into late 2025.
Investment Activity and Retail Sales Volume
Retail investment slowed in 2024 but rebounded somewhat, with $108 million in sales volume over the past 12 months—still below the five-year average of $151 million.
- Average Cap Rate: 6.9%
- Average Price per SF: $198
- Buyer Profile: 95% private investors and owner-users
- Top Sale: $10.2M acquisition of a Burlington-anchored center and adjacent Rite Aid building (175,000 SF)
Most deals remain small-format assets under 5,000 SF trading for under $1M. However, redevelopment activity is expected to remove underutilized retail stock and keep inventory tight.
Economic Context
Spokane remains the economic hub of Eastern Washington, with employment anchored by government, education & health, and retail trade. While population is still growing, it has slowed, and lower-than-average incomes are affecting consumer spending.
Retail sales in the region declined in 2023, according to Washington State Department of Revenue data. This may apply downward pressure on achievable rents if trends continue, though Spokane’s affordability and job diversity provide a buffer against national volatility.
Submarket Performance Snapshot
| Submarket | Vacancy | Asking Rent | Rent Growth | Under Construction |
|---|---|---|---|---|
| Valley | 3.2% | $15.32 | +2.5% | 25,000 SF |
| South Hill | 9.8% | $23.59 | +2.8% | 114,000 SF |
| NE North Metro | 7.9% | $18.48 | +3.0% | 0 SF |
| Spokane CBD | 2.2% | $19.64 | +2.2% | 0 SF |
| Strip Centers | 5.3% | $17.41 | +1.5% | 0 SF |
Outlook for Spokane Retail Real Estate in 2025
The Spokane retail leasing market remains fundamentally sound. While retail sales are under pressure, tight construction and steady leasing activity support rents and occupancy rates across most subtypes.
What to watch:
- Retailers seeking smaller footprints in neighborhood centers
- Owner-users pursuing acquisition as interest rates stabilize
- Demand for well-located sites from national tenants (Dollar General, Sierra, UPS, etc.)
- Mixed-use redevelopment and infill opportunities in Spokane Valley and South Hill
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📩 Need help evaluating your Spokane retail property?
We’re local experts in leasing, investment sales, and repositioning strategies. We have leased and sold hundreds of thousands of square feet of retail to tenants such as- Starbucks, Regal Theaters, JC Penney, Lenscrafters, and hundreds more, so you could say we know a thing or two.
Reach out to Eric Peterson at [email protected] to schedule a confidential consultation.
