Downtown Spokane’s empty office buildings have lost millions in assessed value. That’s a concern for the entire region, business leaders say
It’s been years since pandemic restrictions were lifted, but that doesn’t mean downtown Spokane has returned to work, so to speak.
Hundreds of thousands of square footage in the city’s downtown core, a whopping 28% of all available office space, lie empty. As a result, some of Spokane’s most prominent buildings saw losses in the millions in their assessed values in recent years.
“We have to look at this as a good wake-up call and realize we have a very serious challenge in front of us,” said Emilie Cameron, president and CEO of the Downtown Spokane Partnership. “We have to be intentional and collaborative and do everything we can both in the private sector, making sure spaces are good city spaces, and then in the public sector, making sure the environment is a place people want to come to work.”
The Spokane County Assessor’s Office started sending out property assessments for 2026 tax statements Monday to nearly 215,000 commercial and residential plots across the region. Those valuations are the county’s estimates as of Jan. 1 and tend to be lower than what a property would fetch on the market.
That’s why the recent purchase of the Sterling Building at 710 W. Riverside Ave. for $2.3 million, around $2 million below the current assessed value and $6.2 million less than its 2024 appraisal, set off alarm bells. Commercial real estate experts and downtown business leaders concerned about the devaluation of downtown also point to the nearly $12 million loss for the Bank of America building at 601 W. Riverside, and the $5.5 million in lost value for the downtown Chase Bank building.
“We have an issue downtown and it’s a real problem, because tenants don’t necessarily want to be here anymore,” said Dave Black of commercial real estate agency NAI Black. “It’s too bad, because we spent the last few decades, since I got into business in 1981, building downtown into an amazing place, and it’s still an amazing place, but most office tenants don’t want to be here anymore.”
Black said the lack of office workers tends to have a trickle-down effect on all the other cursory services and shops downtown, because “if the office tenants aren’t here, the retailers, the restaurants don’t necessarily want to be here.”
As an example, he pointed to the 2023 closure of SukiYaki Inn, which served Spokane residents for 74 years out of Black’s building at Bernard Street and Main Avenue.
“Now it’s vacant,” Black said. “My income has gone way down, and the assessed value was a tiny bit less than last year. I’m going to appeal it, because it needs to be way less.”
Spokane County Assessor Tom Konis said the decreased values are due primarily to the lack of commercial tenants downtown, an issue cities across the Northwest and country have had to contend with post-pandemic as businesses re-evaluate space and culture needs. Downtown office values may have dropped an average of 6%, and at higher rates for larger complexes, but Konis does not believe it will lead to a noticeable shift to taxpayers elsewhere in the districts that include downtown.
“Anytime we lower the value or put an exemption on it, in theory, everybody else has to pay it, but it isn’t going to be a huge impact,” Konis said. “It’s really very negligible; it would be multiple spaces past the decimal point.”
While the vacancies are rooted in the cultural shift surrounding office work post-pandemic, Black and his peers believe the issue is being exacerbated by safety concerns downtown.
Craig Soehren, a longtime commercial broker at Kiemle Hagood, said those concerns, either real or perceived, are the overarching reason cited by tenants for steering clear of the area.
“I’ve worked downtown for 41, almost 42 years now, and the stuff I’ve seen in the last two years is stuff I’ve never seen before,” Soehren said. “In the past, you’d maybe see some feces on the ground every once in a while. But now, it’s open drug dealing, open drug use.”
Soehren said employers look to minimize risk to their businesses and employees, and that’s why some are looking elsewhere in the county to put down roots. Last year, Travelers Insurance vacated 75,000 square feet at the Crescent Building at 719 W. Main Ave. and relocated to Spokane Valley. The parcel’s lost $7 million in assessed value since 2022, including a $3.4 million devaluation year over year.
Irvine, California-based Red Tail Land Development confirmed preliminary plans to convert the historic building into 97 multifamily living units last year, one of just a handful of conversion efforts that may help fill empty space downtown, as previously reported by The Spokesman-Review. Around the corner, developer Jordan Tampien and a group of investors purchased the historic Peyton Building, at 10 N. Post St., with plans to convert the former office space into 96 apartments.
The impacts of the region’s housing crisis and the opioid epidemic may be most visible downtown, but Soehren said the economic impacts stretch well beyond the area.
That’s why he’s supportive of regional collaborations attempting to address those challenges, like the recent agreement between local governments to share data and resources for homelessness services, or the burgeoning Safe and Healthy Spokane Taskforce, a proposed partnership between Spokane County’s private and public leaders aimed at finding solutions to incorporate into an eventual tax measure that would fund a new jail, treatment center and improvements to the regional public safety system.
“Spokane needs to get their act together, because we have so much going for us,” Soehren said.
Cameron agreed, adding that leaders and community members across the region “should all be very alarmed” about the future of downtown Spokane.
“It’s such a critical source of tax revenue for our cities and our local governments, and those are revenues that help support the services in every single neighborhood,” Cameron said. “We often talk about how downtown is everyone’s neighborhood, and we have to pay particular attention to the economic health of downtown, because it does affect every neighborhood.”
Black believes a change of leadership at the state and city level would lead to a more hospitable environment for prospective tenants. He lamented the recent decision by the Washington State Supreme Court to strike down the voter-approved citywide anti-homeless camping law in April, and he does not have much faith in its replacement suggested by Mayor Lisa Brown a few weeks later.
The Spokane City Council will vote on Brown’s proposal, which would overhaul relevant camping, emergency shelter and related homelessness laws while tacking on a citywide ban on camping, in mid-June.
A recent survey from Greater Spokane Incorporated found more local residents feel safe visiting downtown Spokane than they did six months ago, which Cameron said is evidence of some of the initiatives already underway. The Downtown Spokane Partnership and city officials have bolstered cleaning crews and continue to find ways to make the space attractive, including adding planters, or lighting to trees and above streets downtown, she noted.
“We call it passive activations – some of the subtle ways that we improve that pedestrian experience,” Cameron said.
The survey saw some improvements in general perceptions of safety downtown, but found most local residents still worry about its future, and a majority of respondents, 61% overall, still say they are visiting downtown today less than they were a year ago. There’s still work to do to make the area more inviting for businesses and visitors alike, Cameron said.
“We know from regional feedback that safety and perception of safety is number one,” Cameron said. “Then we have to follow that through with activities and an overall sense of just excitement, which is what downtowns are synonymous for.”