After three days in New York City, meeting with developers, real estate brokers, and branding experts like Ryan Serhant, one thing became crystal clear: The office market isn’t dead, but the era of passive leasing is. Cities like New York are adapting fast, reimagining what office space can be. Spokane has an opportunity to do the same.

Downtown Spokane, like many smaller metros, faces a critical moment. Office vacancies are elevated, and tenant objections have become common refrains: "no one goes downtown," "not enough amenities," or "too much risk." But what if we stopped accepting these challenges as fixed realities and instead treated them as design problems to solve?

During my time in NYC, I visited several repositioned office buildings that have successfully turned around their leasing trajectories. One example: 10 Grand Central, where the owner invested in a complete lobby redesign, added a tenant lounge and terrace, a meeting lounge for 200 participants, podcast gallery, and screening room with a 150-inch screen, and incorporated modern, hospitality-inspired touches. All of which foster a club-like atmosphere, a place to belong. Tenants responded. The building, once overlooked, is now home to fintech and startup firms looking for energy and identity.

That theme came up again in conversations: tenants aren’t just leasing space. They're leasing a brand. Their office needs to reflect their culture, attract talent, and make a statement. It’s not just about square footage anymore.

In Spokane, we’re starting to see early signs of this thinking. Mixed-use spaces like the Wonder Building are creating more experiential destinations. The 201 West Building, with river views and near 100% occupancy, is a strong example of how quality and location still command demand. We should also keep an eye on the Fidelity Building, which is undergoing a complete exterior renovation.

Let’s not forget, parking remains king. Fortunately, Spokane has an exceptional skywalk system that connects directly to parking structures, offering convenience few cities can match.

Here are a few things property owners in NYC are doing from which we can draw inspiration. 

1. Renovation and amenities: In New York, many Class B and C buildings are transforming into Class A-like assets through lobby overhauls, high-end fitness centers, rooftop lounges, and shared conference facilities. In Spokane, landlords should consider similar amenity packages, even if on a smaller scale.

2. Flight to quality: Trophy buildings like One Vanderbilt have zero vacancy because they deliver a premium experience, in addition to being in a quality location. Spokane can embrace that mentality by investing in modern design, sustainability upgrades, and tenant-centric amenities. It’s a good time for tenants to upgrade their office space, expand, relocate, or right-size while the market is more flexible—and for landlords to make strategic investments to attract those tenants.

3. Incentives and flexibility: NYC landlords are offering free rent, large tenant-improvement allowances, and flexible lease structures. The city of New York is even offering tax incentives for companies signing large leases, employee credits, energy cost saving programs, rent tax elimination and reduction, employee relocation and assistance programs, and more. Spokane landlords should assess whether they are competitive in today’s environment, and if not, how they can bridge that gap creatively. We also need to explore how our local government and economic development groups can partner with landlords to help drive employers back into the urban core.

4. Repositioning for alternative uses: Office-to-residential conversions are becoming more common in NYC. Spokane might consider adaptive reuse for underperforming properties, particularly those that are less viable in a hybrid work economy. The Peyton Building’s transformation into a 96-unit mixed-use residential project is one local example of this trend.

5. Branding matters: Perhaps the most important takeaway: you can't just list a building on the Multiple Listing Service (MLS) and expect tenants to show up. Buildings need a brand, a story, and a strategy. That means intentional marketing, curated visuals, and positioning your building not just as space, but as a product.

Perception gap

One of the most common objections I hear from tenants is, "no one goes downtown." But that perception doesn’t align with actual traffic data.

Vehicle counts from major Interstate 90 off-ramps into downtown Spokane—sourced from the Washington State Department of Transportation—suggest growing volumes compared to pre-pandemic levels.

When data for the Lincoln, Monroe, and Division streets exits off of I-90 are considered together, they have a combined 6.3% increase in vehicle counts from 2019 to 2023, despite a slight decline in traffic exiting off Division. This is just a snapshot, of course—we’re not capturing traffic entering from the north or other routes. But it still helps us challenge the “no one’s downtown” narrative.

That said, this data tells us how many people are driving into the city, but not what they’re doing once they arrive. They may be commuting through, not stopping. It’s downtown’s job to be captivating enough to make them stop—whether that’s for coffee, a meal, shopping, or going into an office. It’s not just about activity, it’s about engagement.

Another challenge we’re seeing, especially from my experience managing and leasing retail space, is the shift in post-COVID retail hours. Many downtown stores are now open from 11 a.m. to 6 p.m., leaving little time for the typical 9-to-5 worker to shop after work. These shorter hours may be tied to staffing or operational costs—but they limit potential consumer engagement. If we want downtown to thrive, we need to align operating hours with consumer behavior.

We need to tell that story better—with data, with visuals, and momentum.

There are encouraging signs of momentum in Spokane: The Peyton Building renovation is a strong example of rethinking downtown assets. New restaurant and retail concepts are gaining traction. Community events like Terrain, Hoopfest, Bloomsday, and farmer’s markets continue to bring people into the city core. We’re seeing signs of renewed confidence. Washington Trust Bank, for example, doubled down on its commitment to downtown by acquiring the Wells Fargo Building, an encouraging signal that some local institutions still believe in the long-term value of the urban core.

To truly shift momentum, we likely need two to three major 'happenings' downtown, such as a significant office user committing to a large lease, a prominent company relocating to the urban core, or a high-profile redevelopment of an office asset. These catalytic moves have the power to generate media attention, foot traffic, and renewed confidence in downtown as a business destination. With those kinds of anchors in place, the broader ecosystem of leasing, investment, and tenant engagement has a stronger chance to thrive.

Spokane has something special: walkability, relative affordability, and a tight-knit business community with a real opportunity to shape the future. But we also have to recognize that the rules have changed. The old playbook--sign the listing, post on LoopNet, wait for the phone to ring—isn’t going to cut it anymore.

To bring tenants back downtown, we have to work for it. That means investments, incentives, storytelling, and above all, a mindset shift. Because the future of downtown isn’t something that just happens to us. It’s something we choose to build.

If you’re a building owner or downtown stakeholder, now is the time to lead. Spokane’s downtown future won’t be rebuilt by chance. It will be rebuilt by choice. Let’s shape it together.
 

Eric Peterson is the president and designated broker of ACTIV8 Real Estate, a commercial brokerage serving clients across Washington and Idaho. Contact him at [email protected] or visit www.ACTIV8RE.com.