Office vacancy is up in Missoula. That’s not a shock to anyone keeping an eye on the market. But before jumping to conclusions, it’s worth asking a better question: What does that vacancy really mean?
Not all empty space is bad. Having a little slack in the market can be a good thing. It gives tenants room to move when their needs shift and allows landlords to refresh space and attract better-fit users. In many ways, it signals that Missoula’s office market is adjusting—not collapsing.
Office Vacancy in Context
Missoula’s office vacancy rate reached 7.54% in 2024, a climb from 5.08% in 2023
To put it in perspective, national office vacancy rates currently hover above 20% in many metros. Missoula, by comparison, is in good shape. Our current rate provides just enough breathing room to allow tenant mobility—without tipping into oversupply.
This isn’t a glut. It’s the return of optionality. Local businesses now have choices, and property owners have a reason to invest in improvements. Both are essential to a healthy market.
More Options, More Movement
When space is scarce, tenants tend to stay put—even when their space doesn’t fit anymore. That could mean they’ve outgrown the layout or need something more efficient. But if there’s nowhere else to go, they make do.
That’s starting to change. With a bit more vacancy, tenants can finally make moves. They can size up, relocate to a better location, or upgrade into more functional layouts.
This movement creates opportunities on both sides. When tenants move out, landlords get a window to refresh or reconfigure. And in a market where rents have increased in the past year, those updates can pay off quickly
Rents Are Holding Strong
Despite the rise in vacancy, lease rates haven’t taken a hit. Quite the opposite—Missoula’s office rents rose sharply over the past year, reflecting continued demand for well-located, high-quality spaces.
That might come as a surprise. After all, vacancy usually puts pressure on pricing. But in this case, we’re seeing a market where tenants are willing to pay more—as long as the space meets modern standards.
What are tenants looking for?
- Natural light and open layouts
- Convenient parking, especially in core areas with limited transit
- Functional floor plans that maximize usable space
- Reliable systems—think HVAC, plumbing, and wiring that just works
It’s not about bells and whistles. It’s about spaces that support productivity and employee satisfaction.
When Tenants Have Choices, Quality Matters
With more office options on the market, tenants are asking tougher questions. Does this space support our workflow? Can our team grow here? How does it reflect our brand?
This kind of scrutiny isn’t a problem—it’s a wake-up call. If your space checks the right boxes, you’re likely in a good position. If not, now might be the time to make some updates.
That doesn’t always mean a gut remodel. Small improvements—like updated lighting, fresh paint, or better signage—can go a long way. Opening up window lines or making minor layout adjustments may be enough to make a space lease-ready again.
A Window of Opportunity for Landlords
Vacancy doesn’t have to be a loss. It’s often a reset—a chance to rethink what your space offers and how you position it.
Today’s tenants are looking for flexibility—shorter terms, efficient layouts, and plug-and-play solutions. If you can deliver that, your space will stand out.
This is a good time to be proactive—not just reacting to vacancies when they happen but preparing space that’s ready for modern expectations.
The Bigger Picture
Every real estate market shifts. Vacancy rates rise and fall. What matters is how you respond—and how well you understand the story behind the numbers.
In Missoula, vacancy is up, but so are rents. That means the market is still healthy—it’s just changing. Tenants are more selective, owners are adapting, and buildings that invest in quality are holding their value.
At SterlingCRE, we help clients think strategically about these changes. We track lease comps, walk buildings, talk to tenants, and help landlords make the kinds of updates that attract better leases and stronger tenants.
Let’s Talk Strategy
Do you have office space that’s coming available? Are you wondering if it’s priced right, or what updates could help it lease faster?
We’re here to help you think through that. Whether it’s small changes with big impact or bigger repositioning opportunities, SterlingCRE is ready to help you confidently make your next move.
