Treasure Valley retail is booming from end to end

Retail is on the ascendancy in the Treasure Valley, much of it in Meridian.  Many retailers who are new to Idaho have planted their flags in the past year, and the Village at Meridian completed its first year with a flourish.

Continuing population growth – The Treasure Valley counts more than 600,000 now – coupled with economic recovery, declining unemployment, job growth and lower fuel prices have drawn new retailers to the greater Boise region, and have helped those already in place to grow.

The retail vacancy rate is in the 5 to 8 percent range, depending on which local commercial real estate brokerage one consults. Vacancies dropped 1 to 2 percentage points in 2014.

“There’s not a lot of quality space in the market for expanding retailers,” said Mike Christensen, part of the retail services group at Colliers International. “I think you will see more developments come on line.”

Meridian, anchored by the new Village at Meridian shopping development, has surpassed the West Bench — home to the Boise Towne Square Mall and the Milwaukee Street retail cluster — as the submarket with the largest share of the Treasure Valley’s retail sector. Colliers calculated Meridian’s 3.5 million square feet accounts for 23.2 percent of the region’s retail. This has surpassed the West Bench’s 2.99 million square feet or 18.9 percent.

“That’s the center of the valley,” said Christensen. “That’s where the majority of rooftops are and the retailers want to be close to the rooftops.”

Expect new retail development to reflect the way the Village at Meridian redefined a shopping center into a lifestyle center. The Village offers stores, restaurants, a movie theater, office space, and a public gathering area with a fountain and other amenities. Its success reflects the fact that some shopping areas have become entertainment destinations.

“Landlords need to create a sense of place,” said LeAnn Hume, senior director and retail specialist at commercial real estate firm Cushman & Wakefield|Commerce. “It’s no longer, ‘Put up brick and mortar and expect someone to move in.’ The millennials have been a huge influence on fast casual and fast food.”

Sara Shropshire, a Cushman retail associate, said the retailers that haven’t modernized are seeing higher vacancy.

“You have to look at what you’re trying to create with a strip center that provides more than a giant parking lot,” Shropshire said. “You see vacant space that exists here are in centers that haven’t been updated.”

Commercial real estate broker Thornton Oliver Keller reported in its 2014 Year-End Market Watch that the Village, which opened in October 2013, leased nearly 110,000 square feet of retail space. The Caldwell Boulevard submarket in Nampa saw 119,000 square feet of new construction with Freddy’s Frozen Custard, Popeyes Louisiana Kitchen and others.

“Today’s shoppers are looking for a complete experience, with amenities that include shopping, dining, and entertainment all in one location,” TOK said. “The presence of traditional soft goods and clothing retailers in neighborhood centers will continue to decline.”

TOK in its year-end report said that nearly 70 percent of the overall retail occupancy came from retailers opening additional Treasure Valley stores, such as Dick’s Sporting Goods, Hobby Lobby, PetSmart, and Walmart Neighborhood Market, all in Nampa; Michaels at The Village, yet another Dick’s on Milwaukee Street in Boise, and a fourth eatery from Chick-Fil-A.

While some retailers have moved from downtown Boise to the Village, or have announced plans to, Bob Mitchell of TOK said he senses the Village might also play a role in strengthening downtown retail.

“I think that now they are getting established in the Village, they are looking at second locations and downtown is a natural place to look,” said Mitchell, a retail property sales and leasing specialist. “I think the Zions Building and the transit center have made downtown a nice place to do business.”

The Boise metro in 2014 welcomed a number of national names new to Idaho, among them Freddy’s, Corner Bakery, ABC Supply and Harbor Freight Tools.

“We are on the map,” Hume said. “We passed a population metric. We have reached over 600,000 people, which has put us on the radar. We are getting the first of many retailers.”