Locally owned. Supported by members.

Commercial firm issues 2019 outlook for Boise area

Boise Centre is open

Thornton Oliver Keller is out with its 2019 Outlook for the Boise Real Estate Market (you can email TOK for a copy). The annual document looks at trends in the area across commercial, industrial and retail sectors – and gives a snapshot of the non-residential real estate sector is performing.

Office market at 15 year vacancy lows

Courtesy Thornton Oliver Keller Commercial Real Estate

The number crunchers at TOK say the vacancy rate for office space dipped to its lowest rate in more than fifteen years – now down to 7.23%. That’s the tightest the market for office space has been since 2002. When you peel away “owner-user” properties (i.e. the JR Simplot Co. owns and occupies its own building), the vacancy rate stands at 10.25%.

“Boise’s office market has developed into a more diverse tenant mix since the recession,” the report notes. “The tech sector is a great example of this. As the cost of living increases in Silicon Valley, Boise is emerging as a viable location for tech companies to open, relocate or expand. Tech companies experiencing growth include Paylocity, Vacasa, Clearwater Analytics, TSheets and Cradlepoint.”

During a presentation at the Building Owners’ and Managers’ Association’s annual symposium Tuesday, TOK’s Al Marino said the current average lease rate for the area stands at $17 per square foot. While that’s an increase over recent years, it is markedly lower than other markets in the region, including Salt Lake City, Portland, Seattle and top towns in California.

Retail: housing prices could cause issues

TOK says retail vacancy dropped from the prior year, to about 9.34%. The report looks at 2018 and does not include a variety of new vacancies, including nearly 300,000 in space to be vacated by Shopko in coming weeks, or the closure of the Sears store at Boise Towne Square that will add about 121,000 square feet of vacant space to the market.

- Story continues below ads -
Iliad Media Group
Tamarack Q4 2020 - lift

Analysts with TOK note that Boise’s increasing national profile are “piquing the interest of out-of-area retailers and retail growth,” but sounds a cautionary note about rapidly rising housing prices.

“Housing prices are… increasing at a rate which average household incomes have been unable to match. Should this gap continue to grow, it will undoubtedly impact disposable income and the type of retailers that can thrive in the market.”

The report notes the Boise Bench could be a new avenue for retail growth.

“As empty nesters are driving up home prices in the North End, millennials are getting priced out and moving toward the Bench which will be further stimulated by the City of Boise’s urban renewal plan to help revitalize the area.”

(Disclosure: My family owns the Vista Village Shopping Center on the Boise Bench, though I have no direct stake in the business).

New projects in Meridian, including projects anchored by both Costco and Winco, as well as the planned Owyhee High School could also drive new retail activity, according to TOK.

Industrial lease rates rising

The valley is seeing increasing demand for industrial spaces, according to TOK. A new 220,000 square foot warehouse for Capitol Distributing is expected to come online in Caldwell, and several large new warehouses will finish construction in areas of south Boise.

One industrial user, Fresca Foods, left 85,500 square feet of space in west Boise for a new, larger facility in Caldwell with 183,000 square feet.

“There are many companies planning to enter the Boise market, looking to lease multiple spaces between 5,000 and 50,000 square feet around the valley,” the report writers note.

The report also covers the market for the investment market, open land and Magic Valley and East Idaho areas.

Local news. Locally owned. Supported by members.

Your membership makes these stories possible. Plus, you get our popular daily email with all our stories delivered straight to you.

Don Day
Don is the founder and editor of BoiseDev. He is a National Edward R. Murrow Award winner and a Stanford University John S. Knight Fellow.

Boise’s Broadway Shopko nearly became a tire warehouse

Nearly two years ago, BoiseDev broke the news that the Shopko location on Broadway Ave. in Boise would close. In the months...

Albertsons sees stock pop after earnings report, rolls out new payment system

Boise-based grocery giant Albertsons reported a strong earnings story Tuesday for its latest corner - causing the company’s stock to pop on...

Eagle business boom: Donuts, bar, coffee, bakery, shops and restaurants come to booming area

Eagle continues its fast growth spurt, with scores of new stores and businesses welcoming customers in the city - as well as...

Data shows shifts in Ketchum economy this year in wake of pandemic

Since recovery from outset of the COVID-19 pandemic, the resort town of Ketchum started to feel busy again. For a time, Blaine...

Popular

Some Boise bike bars propose less stringent regulations amid complaints

Boise City Council was prepared to put the hammer down on controversial bike bars, but business owners are hoping for a compromise. 

Winter adjustments to Whitewater Park planned to stop ‘collapsing’ wave

Boise’s expanded whitewater park technically opened last July, but the city closed the centerpiece wave formation to wave riding action for nearly...

Another Idaho resort (yes, another one) listed for sale

Another Idaho resort is for sale.  This time it's is the Sourdough Restaurant and Lodge right off of Highway...

Albertsons sees stock pop after earnings report, rolls out new payment system

Boise-based grocery giant Albertsons reported a strong earnings story Tuesday for its latest corner - causing the company’s stock to pop on...
Tamarack Resort Q4 2020

Related

Boise commercial real estate firm rebrands

After 29 years as Thornton Oliver Keller Commercial Real Estate, the Boise-based firm announced a new name and brand this week.

New office building to anchor expansion of Eagle Rd. campus

The Bridges at Lakmoor will soon see a flurry of construction activity. BoiseDev first told you about an expansion for Intuit....

Rising rents continue to worsen affordability problems in Boise area: report

Thornton Oliver Keller put out its annual deep dive into the state of the multi-family housing market for the Boise Metro Area....

Downtown Boise’s retail vacancy hits all-time record low

There aren't many spaces to put a new retail outlet in the Downtown Boise core. In fact, according to tracking by Boise...
Boise Centre is open


Latest

‘Sort of magical:’ Vegas country bar launches offshoot in Emmett – with a different vibe (and racetrack)

Country music tunes will soon waft from a portion of the old Boise Cascade laminate plant in Emmett. And Chris Lowden...

Twilegar challenges Bennetts in rare contested Ada prosecutor race

For only the third time in roughly four decades, voters can choose between a Democrat...

McCall’s hospital gets big upgrades with $40-million project

St Luke’s McCall is undergoing a major expansion with half of the hospital not seeing major improvement in 60 years.

Who will head Boise Fire? Chief finalists make their pitch

The two finalists to take the helm of the Boise Fire Department made their case to the community Wednesday night. 

‘There’s no affordable housing’: Essential workers face big housing challenges in Idaho resort community

Jeff Emerick was born and raised in the scenic, tourist destination and resort area that is Blaine County. But as time went...

“CCDC 3.0:” McLean talks about housing and the direction of Boise’s urban renewal agency

Boise Mayor Lauren McLean largely campaigned on changing the approach to growth and housing in Boise. With both rent and housing prices...