Demographic Shifts Driving Spokane’s CRE Boom
Spokane has rapidly transformed from a regional hub to an emerging star of Inland Northwest commercial real estate investment. Demographic tailwinds are a big reason why. The metro population now approaches 600,000 and climbing steadily, making Spokane the second-largest city in Washington. Unlike coastal metros, Spokane continues to welcome an influx of new residents – from young professionals drawn by the lower cost of living to retirees and remote workers seeking its “near nature, near perfect” quality of life. This steady population growth (about 1,000 new residents per year in the city alone) is fueling demand across all property types.
Not only is the population growing, but its purchasing power is rising. In fact, the Spokane area has seen one of the nation’s fastest upticks in high-income households (those earning $200K+ annually). Many affluent buyers from California, Oregon, and other high-cost markets are choosing Spokane for its attractive lifestyle and business-friendly climate. These demographic shifts translate into stronger retail spending, housing demand, and a deepening talent pool – all positive indicators for commercial real estate. In short, Spokane’s people are its power: a younger, wealthier, and expanding population base that underpins the city’s CRE growth trajectory.
Sector-Specific Opportunities in Spokane’s Growth Corridor
Across Spokane’s commercial real estate landscape, virtually every sector is brimming with opportunity. The city’s pro-development mindset and organic market growth have created a “growth corridor” effect – from downtown out to the Spokane Valley and north along new transit routes. Here’s a look at key sectors attracting savvy brokers and high-net-worth investors:
Industrial & Logistics – The Inland Northwest Supply Hub
Is Spokane becoming a logistics hub for the Inland Northwest? Absolutely. Industrial real estate is among Spokane’s hottest assets, driven by e-commerce and the city’s strategic location. Spokane sits at the crossroads of major highways (I-90 east–west and the emerging North Spokane Corridor north–south) and offers robust rail and air cargo links. This makes it ideal for distribution centers and manufacturing alike. Recent high-profile developments underscore this trend – for example, Amazon’s new 1.3 million sq. ft. fulfillment center in Spokane Valley brought over 1,000 jobs and affirmed Spokane’s role as a regional logistics center. With the ongoing completion of the North Spokane Corridor freeway (set to fully open by 2030), an additional 2,100 acres of land along the route are being unlocked for commercial and industrial development. Industrial vacancies remain relatively low even as new space comes online, and rental rates are steady, indicating healthy demand.
For investors eyeing industrial properties, Spokane offers everything from modern bulk warehouses near the airport to flex-space industrial parks in emerging submarkets. The North Spokane Corridor (NSC) in particular is a game-changer: it’s funneling growth into the Hillyard industrial district and surrounding areas that were previously hard to access. Properties near new NSC interchanges are prime for development – think truck terminals, light manufacturing sites, and last-mile distribution centers. On Brevitas, you can already find Spokane industrial listings featuring vacant industrial land and fully leased warehouse investments poised to benefit from this infrastructure upgrade. In short, Spokane’s industrial sector is booming, cementing the city’s reputation as the Inland Northwest’s logistics hub.
Retail Corridors – Adapting and Thriving
Spokane’s retail market is proving remarkably resilient and adaptive, turning demographic growth into new retail opportunities. As population and incomes rise, retailers are expanding in both urban corridors and suburban centers. Long-established shopping districts like downtown’s River Park Square and North Division Street are seeing revitalization with new mixed-use projects and national tenants attracted by the influx of consumers. Equally important are the suburban retail hubs – areas such as Spokane Valley and north Spokane (near Whitworth and Wandermere) – which locals often refer to as emerging “growth corridors” for retail. These areas are experiencing new grocery-anchored centers, restaurants, and service retail to serve growing neighborhoods.
Where are the retail growth hotspots in Spokane? One example is along East Sprague Avenue into Spokane Valley, historically a retail strip that is reinventing itself with fresh development. The addition of big-box stores (Costco, Home Depot, etc.) and renovation of older shopping plazas have rejuvenated this corridor. Likewise, the North Spokane Corridor’s future interchanges at places like Wellesley Ave are expected to spark retail and commercial nodes to serve increased traffic. Investors looking at retail in Spokane will find solid foot traffic and sales in well-positioned centers. Neighborhood retail vacancy is relatively low, and savvy value-add plays exist in updating older strip malls or repurposing properties for new uses (such as adding drive-thrus or medical retail). Overall, retail in Spokane is far from dead – it’s evolving. High-growth residential areas mean strong demand for grocery stores, eateries, and everyday services, making retail assets in those pockets increasingly attractive. Many such opportunities are available via Brevitas’ Spokane commercial listings, where you can identify value-add strip centers and NNN retail investments in up-and-coming districts.
Multifamily & Mixed-Use – Housing the Influx
No surprise, Spokane’s population growth has put multifamily properties squarely in investors’ sights. How strong is Spokane’s multifamily investment market? In a word, robust. The city experienced record apartment construction in recent years – with downtown Spokane permitting over 1,000 new multifamily units last year (shattering a two-decade record). Even so, vacancy rates remain tight in most submarkets, and rent growth has been healthy, reflecting pent-up demand from newcomers. Spokane’s rents and price-per-door are still more affordable than Seattle or Portland, giving investors better yield potential while riding a growth trend. Class B value-add apartments in Spokane’s suburbs, for instance, have attracted out-of-state buyers looking for solid cash flow and upside through light renovations.
Key areas for multifamily development span the region. Downtown and the University District are seeing new mid-rise apartments catering to young professionals and students, often with ground-floor retail (indicative of a broader mixed-use trend). In Spokane Valley and North Spokane, developers are building garden-style communities to meet family housing demand. Notably, Spokane has Opportunity Zone multifamily listings – parts of the lower South Hill, Hillyard, and the University District have federal Opportunity Zone designation, giving tax-savvy investors an extra incentive to fund new housing projects there. In these zones and beyond, multifamily cap rates in Spokane typically beat those in coastal metros, yet the strong tenant demand and rising rents provide an attractive growth story. Whether you’re considering a stabilized apartment complex or a mixed-use development site, Spokane’s multifamily sector offers a compelling blend of stability and upside for long-term investors.
Office & Adaptive Reuse – Reinvention in Progress
Spokane’s office market presents a nuanced picture. Like many mid-sized cities, downtown office vacancies did tick up in recent years (downtown vacancy is around the mid-teens percentage-wise), largely due to remote work trends. However, Spokane’s office sector is far from depressed – in fact, it’s showing resilience and creative reinvention. The city benefits from being a regional center for healthcare, education, and professional services, which keeps a baseline demand for office space. Major medical providers and universities (like Gonzaga and WSU Spokane) continue to expand their footprint, often occupying new office and research facilities. Meanwhile, smaller tech firms and back-office operations from pricier cities are increasingly considering Spokane for satellite offices, attracted by lower costs and a high quality of life for employees.
What’s happening with Spokane’s older office buildings? They’re getting new life. Spokane has embraced adaptive reuse in a big way. The city and state recently rolled out incentives to convert underutilized commercial buildings into housing (for example, a new Commercial Conversion tax deferral program encourages turning empty downtown offices into apartments). Several historic buildings downtown have already been successfully repurposed into trendy lofts, co-working spaces, or mixed-use developments. This trend not only absorbs excess office inventory but also revitalizes Spokane’s urban core with new residential energy. For investors, it means office assets can’t be viewed in the traditional way alone – the highest and best use might be a conversion play. Class A suburban office, on the other hand, has remained solid with medical office and financial services firms driving leasing in areas like Spokane Valley and North Side. Brevitas features a number of Spokane office listings – from modern medical office condos to entire office buildings – that savvy investors could reposition or hold for the market’s next growth cycle as downtown regains momentum. In sum, Spokane’s office sector is in a transitional phase, but that transition is creating new opportunities rather than diminishing them.
Infrastructure Upgrades Fueling the “Growth Corridor”
No discussion of Spokane’s rise would be complete without highlighting the significant infrastructure developments acting as catalysts. Foremost is the North Spokane Corridor (NSC) – a decades-in-the-making, 10.5-mile freeway project that is redefining traffic flow and land use in the region. Often dubbed Spokane’s “growth corridor,” the NSC is more than 70% complete and has already opened new sections to traffic. When fully finished, it will connect I-90 on the south to US-395/U.S. 2 on the north, creating a high-speed north–south arterial through the city. The impact on commercial real estate is enormous. Areas that were once secondary are becoming prime. For example, the Hillyard neighborhood in northeast Spokane, historically an industrial area, now finds itself adjacent to a major freeway spur – making it ripe for new industrial parks, warehouses, and service businesses. State transportation planners estimate that the NSC unlocks roughly 2,100 acres of adjacent land for commercial and industrial development. Investors are already positioning to acquire parcels along the route, anticipating a surge of business activity once the freeway is fully operational.
Beyond the NSC, there’s a flurry of infrastructure investment across Spokane County. Over $600 million in road projects are underway in 2024 alone, improving key arteries and interchanges. In Spokane Valley, the city completed the Barker Road grade-separation project to streamline access to the new Amazon facility and surrounding industrial lands – a clear signal of support for growth. Downtown Spokane has seen its share of upgrades too, including the rebuilt Post Street Bridge and improved streetscapes that make the urban core more walkable and attractive for retail and office use. Meanwhile, Spokane International Airport continues to expand its cargo facilities and add routes, bolstering the region’s connectivity. The airport’s growth, combined with new rail transload facilities, enhances Spokane’s appeal as a logistics and manufacturing base (further boosting demand for industrial land and warehouse space near transit corridors).
How do these projects benefit investors? Infrastructure improvements are effectively “value-add” for the entire market – reducing transit times, opening new submarkets, and increasing property values along improved corridors. The North Spokane Corridor, in particular, is often cited by local experts as a once-in-a-generation development: it’s already shifting growth northward, with new commercial construction popping up at planned interchange sites. For those looking at Spokane’s long-term potential, understanding the infrastructure map is key. The city’s proactive approach to transportation and utilities signals a welcoming environment for development. Areas that might have been overlooked a decade ago (due to access issues) are now squarely on the map. In short, Spokane’s growth is not happening by accident – it’s being actively enabled by infrastructure, creating a virtuous cycle for commercial real estate values.
Future Outlook: Spokane’s Moment in the Inland Northwest
All signs point to Spokane’s commercial real estate momentum continuing in the years ahead. The combination of steady demographic growth, diverse economic drivers, and supportive development policies positions Spokane as a beacon for investors seeking opportunity beyond the overheated coastal markets. What can investors expect from Spokane’s CRE market in the next 5–10 years? For one, a maturation of the trends already in motion. We anticipate a wave of new construction and redevelopment projects across the city. Downtown Spokane’s skyline may see cranes again – with proposals for mixed-use high-rises (like the recently announced Spokane Falls Tower project) indicating renewed confidence in the urban core. In the suburbs and fast-growing outskirts, expect further retail and office nodes to develop organically as rooftops fill in. Spokane Valley, for instance, is likely to continue outpacing the City of Spokane in population growth percentage, which means continued demand for everything from apartments to healthcare clinics in the Valley.
Another key part of the outlook is Spokane’s role as the capital of the Inland Northwest. The city has long been the business and cultural center for a vast region stretching into North Idaho and western Montana. That influence is strengthening. As remote work enables more professionals to choose secondary cities, Spokane’s high quality of life and emerging tech scene could attract new companies or talent that historically might have gravitated to Seattle or Boise. This “brain gain” would bolster office and flex-space demand. Additionally, sectors like healthcare (Spokane’s largest employment sector) and education (with multiple universities) will continue to anchor stability and growth. With two medical schools and a burgeoning health sciences campus in the University District, Spokane is cultivating a specialized workforce that can spawn biotech or research-related real estate needs.
Crucially, investors should watch Spokane’s Opportunity Zones as catalysts for future development. The city and county contain 11 designated Opportunity Zone tracts (covering parts of downtown, the University District, lower South Hill, Hillyard, and more). These zones have already seen early-stage investment activity. As we approach key deadlines in the federal program, there may be a push to launch more Opportunity Zone projects – meaning new multifamily, innovation centers, or industrial developments in historically overlooked areas. This aligns with Spokane’s broader growth strategy: encouraging development where it’s needed most and spreading prosperity citywide. For investors, it means there are potential tax-advantaged deals on the table that also align with Spokane’s trajectory.
Overall, the future looks bright. Cautious optimism is warranted (interest rates and economic cycles always play a role), but Spokane has proven its resilience through recent national downturns. Vacancy rates in most sectors have remained manageable, and importantly, local leadership is actively planning for sustained growth (through initiatives like comprehensive plan updates and housing action plans). In other words, Spokane is managing its growth so that opportunity continues to thrive without the growing pains seen elsewhere. For high-net-worth investors and CRE professionals, the city offers a rare combination: growth market upside with stable-market risk profiles. That’s a formula that’s hard to beat.
Key Takeaways and Next Steps
- Spokane’s growth corridor is real: Robust population gains (and rising incomes) are fueling demand for commercial space, making Spokane commercial real estate investment increasingly attractive.
- Diverse CRE opportunities: Industrial is booming as Spokane becomes a logistics hub (thanks to the North Spokane Corridor and new Amazon-scale facilities). Retail is reinventing itself in growing neighborhoods. Multifamily is in high demand citywide, and even the office sector is finding new life through adaptive reuse and fresh tenant interest.
- Infrastructure as a catalyst: Major projects like the North Spokane Corridor are not just highway improvements – they are opening new land for development and connecting investors to untapped submarkets. Over $600M in current road upgrades and strategic public investments are paving the way (literally) for Spokane’s next decade of growth.
- Pro-growth, forward-looking climate: Spokane’s civic and business leaders are proactively planning for the future (from updated zoning for mixed-use centers to incentives like Opportunity Zones and conversion tax breaks). The region’s economy is broad-based – healthcare, education, tech, manufacturing – providing a stable foundation for CRE ventures.
- Upside with stability: In the Inland Northwest, Spokane stands out as the rising star offering big-city amenities and growth without big-city headaches. Investors can find solid yields here and ride appreciative trends that are backed by genuine population and job growth.
In summary, Spokane’s growth corridor is no longer just a local talking point – it’s a tangible reality attracting national attention. For brokers and high-net-worth investors looking to capitalize on this momentum, now is the time to engage. The Emerging Star of Inland Northwest CRE offers both immediate opportunities and long-term potential. Feel free to explore Brevitas’s curated Spokane listings to get a firsthand look at available investments across every sector. Our platform features everything from development land along the North Spokane Corridor to stabilized multifamily assets in prime neighborhoods. As always, the Brevitas team is here to provide guidance, local insights, and access to off-market opportunities. Spokane’s rise is underway – and we invite you to be part of its next success story on Brevitas.
