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Treasure Valley real estate keeps breaking records

The third office building under construction at Ten Mile Crossing in Meridian. The cost of Treasure Valley office space has reached record highs. Photo by Teya Vitu

Every type of commercial real estate, whether it’s industrial, retail or multi-unit housing, continues to break all previous records for the Treasure Valley.

Total vacancy (5.71%) and multi-tenant vacancy (8.95%) rates for office space in the Treasure Valley are both at a 20-year low, according to the Thornton Oliver Keller February 2020 commercial real estate report. Office vacancy in downtown Boise (5.9%) is at an 11-year low.

In downtown Boise, overall asking rates have increased $0.75 since 2019 and overall asking rates for class A office space is the highest ever on record, according to the report.

Retail leasing is also breaking new ground. Class A retail asking rates ($20.00 for triple net leases) are at their highest in over 15 years, and TOK reports that the overall asking rate has increased $0.90 in the past 12 months to $15.90.

Though industrial vacancy and class A asking rates were flat last quarter, overall industrial asking rates increased $0.05 last year.

“We’re incredibly optimistic over the future industrial market here in Boise,” said TOK’s Gavin Phillips, who is an industrial investment specialist with additional expertise in industrial leasing and sales. “We expect 2020 to be incredibly active on the development side as well as in the leasing and investment sides. Vacancy rate is incredibly low right now.”

Phillips added: “Businesses continue to expand into the Boise market and need more space where they can grow. We have major developers and investors from both Idaho and out-of-state coming in to build here.”

He mentioned Ball Ventures Ahlquist as a good example of a major developer bringing new industrial properties online in the Treasure Valley. Over 2 million square feet of new industrial space is currently in the planning stages for the region.

“We also have new businesses like the Amazon coming into the area,” Phillips continued. “So we’re seeing these logistics and fulfillment business types absorbing chunks of the available industrial space. They are constructing a type of industrial building never seen before in the Treasure Valley.”

In line with the recent news that Boise is one of the most livable state capitals in the country, it just earned the second-highest number of points in a ranking of the best state capitals for renters according to RENTCafe.com, a national apartment search website and blog.

“There’s a new place on the renters’ radar and that is the capital of Idaho … according to our latest analysis of rentals and demographics data,” RENTCafe’s Adrian Rosenberg wrote in an email to the Idaho Business Review.

The features that advanced Boise’s ranking in the rental market evaluation were:

  • An average rent of $1,179 and a median income of around $58,300, giving the area a rent-to-income ratio of 24%, which is below the widely accepted cost-burden threshold of 30%.
  • It’s a renters’ market — with a 60% share out of the total number of households in Boise.
  • 32% of the rental inventory consists of high-end units.
  • Boise has high livability, and it’s one of the safest state capitals in the country with a violent crime rate well below the national average for communities of the same size.

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