Industrial Market Trends for Spokane County Q3 2019

Industrial Market Trends for Spokane County Q3 2019

  • 03 Oct Off


As the graph suggests, average monthly lease rates are generally increasing, with the 2019 year-to-date rate of $0.54/sq. ft., NNN, the highest of the four-plus year period. For reference, available competing market industrial asking rates are averaging about $0.56/sq. ft., NNN. As will be discussed in the vacancy and absorption trends section, lease activity has been steady, with no reason to assume any change in the near term.

Current Vacancy Levels

Vacancy rates vary widely from building to building, with CJM’s recent survey indicating an overall vacancy rate of about 4.51% (down about 70 basis points from CJM’s Q1 2019 survey). Discussions with local brokers suggest recent Spokane industrial vacancy rates are generally similar to CJM’s survey results.

Absorption Trends

2019 projected leasing activity is expected to be the highest since 2015, which also coincides with rising average monthly lease rates indicating strengthening demand for newer office-warehouse product.


PWC’s Pacific Region warehouse OAR survey, which is generally more applicable than Realty Rates national survey, suggests warehouse OARs declined modestly year-over-year, but both surveys only provide an overview for the warehouse/industrial market.

The ten Spokane properties listed in the table below were tenant-occupied and sold during the past four years. Overall capitalization rates (OARs) among the comparable sales range from 6.35% to 8.91% with a central tendency of 7.99%.


No. Designation/Location Year Built/Ren. Sale Date RSF Sale Price OAR
1 ABRA Auto Building, 1827 East Trent Avenue, Spokane 1982 Active 7,593 $1,335,000 6.99%
2 East Mansfield Building, 11816 East Mansfield Avenue, Spokane Valley 1988 Active 21,000 $1,450,000 6.35%
3 Van Marter Drive Property, 2701 North Van Marter Drive, Spokane Valley 1983 July 8, 2019 45,657 $3,050,000 8.51%
4 Ella Facility, 225 North Ella Road, Spokane 1955/1984 April 24, 2019 62,000 $2,270,000 8.37%
5 Haven Street Park, 3421 North Haven Street, Spokane 1981/1987 March 30, 2018 29,340 $1,390,000 8.91%
6 Canon Park Building, 7826 North Market Street, Spokane 1993/2005 June 29, 2017 21,300 $1,150,000 8.14%
7 International Gateway Corporate Center, 10102 East Knox Avenue, Spokane 2001 February 2, 2017 57,250 $8,985,000 8.32%
8 Koren Building, 204 South Koren Street, Spokane Valley 1997 December 15, 2016 19,716 $1,010,000 8.47%
9 Madelia Building, 724 North Madelia Street, Spokane 1962 September 23, 2016 26,300 $875,000 7.83%
10 North Madelia Building, 416 North Madelia Street, Spokane 1995 June 26, 2015 6,200 $450,000 8.46%


As the graph illustrates, sale prices per square foot were relatively flat from 2012 to 2016 (ranging from about $48 to $53/sq. ft.), but have increased substantially over the past two years in conjunction with increasing sales volume.

Marketing & Exposure Periods

Spokane and Spokane Valley office-warehouse building sales reported marketing periods ranging from about one month to two years, with the typical marketing time about three to six months.


In summary, vacancy and rental rates have remained relatively stable over the past year, with asking industrial monthly lease rates in a general range from $0.35 to $1.00/sq. ft., NNN, while our survey of the competing market estimated industrial vacancy at about 4.50%.

Based on the evidence, industrial rental rates and vacancy should remain steady in the near term while leasing demand for small industrial units is improving with year-to-date executed leases on pace to be the highest in three years. Industrial building sales volume and prices per sq. ft., year-to-date, are higher year-over-year. Taken together, the Spokane industrial market is improving with sufficient demand.


  No. 1 No. 2 No. 3 No. 4 No. 5
Name Howard Building ABRA Auto Building East Montgomery Industrial Bldg. Dishman Road Flex Building Tapas Business Park-Unit 6
Address 1306 North Howard 1827 East Trent Ave. 10502 East Montgomery 315 South Dishman Road 16115 East Trent Avenue
City Spokane Spokane Spokane Spokane Valley Spokane Valley
Market North Spokane City East Spokane City Spokane Valley Spokane Valley Spokane Valley
Sale Date Active Active March 4, 2019 August 1, 2018 April 23, 2018
Year Built/Ren. 1950/1999 1982 1985 1984 2017
Building GBA 5,744 7,593 8,800 5,925 6,064
Fee Simple/Leased Fee Leased Fee Leased Fee Leased Fee Fee Simple Fee Simple
% Office 10.0%[1] N/A 25.8% N/A 20.0%
Clear Height 12 feet 16 feet 12 feet 20 feet 20 feet
Parking Adequacy Appears Adequate Appears Adequate Appears Adequate Appears Adequate Appears Adequate
# of Truck Doors 1 GL 2 GL 3 GL 2 GL 3 GL
Exposure[2] ~5,000 ADT ~20,000 ADT ~11,000 ADT ~1,000 ADT ~15,000 ADT
Sale Price $1,300,000 $1,335,000 $1,100,000 $480,000 $810,000
Price/SF $226 $176 $125 $81 $134
Comments Well-maintained, single-story commercial building one block north of Spokane Arena Corporate-leased auto repair facility in east Spokane commercial corridor. Central Spokane Valley multi-tenant office-warehouse with additional land Metal building located in a transitional area of southwest Spokane Valley Newer free-standing, metal building with frontage on commercial arterial, fenced yard

[1] Estimated based on offering memorandum, exact percentage is not available


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CJM Advisors is a full-service commercial real estate appraisal and advisory firm. CJM appraisers come from a variety of backgrounds in real estate, finance, planning, and education. CJM has as owners, partners or employees three individuals who hold the MAI designation of the Appraisal Institute ( Designated members have met rigorous requirements relating to education, testing, experience and demonstration of knowledge, understanding and ability. The MAI membership designation is pertinent to our work here at CJM. Appraisers who hold this designation are experienced in valuation and evaluation of commercial, industrial, residential, and other types of properties. These appraisers are qualified to advise their clients on a broad range of real estate decisions.

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