Stakeholders discuss future of real estate, impacting areas 

Alx Stevens//February 17, 2022

Stakeholders discuss future of real estate, impacting areas 

Alx Stevens//February 17, 2022

Significant change has happened in the commercial real estate industry during the past 25 years — particularly in the last two to five — however, what hasn’t changed much is the dedication of the Building Owners and Managers Association (BOMA) of Idaho to following the industry and providing expertise to stakeholders, all of which was evident during the 25th annual BOMA symposium held at Boise Centre Feb. 15.  

From explosive scrambling for retail establishments — particularly fast-food — to a newly spiked demand for industrial spaces, experts agreed that despite current challenges of rising costs, lacking infrastructure and shrinking land availability (to name a few), Boise — and Treasure Valley — remain hot for incoming and expanding businesses. 

LeAnn Hume, with Cushman & Wakefield Pacific, discusses retail and land development during BOMA Idaho’s 25th annual symposium, held Feb. 15 at Boise Centre. Photo by Alx Stevens

What does that mean for the future? 

Five panelists — LeAnn Hume, Wes Jost, Casey Lynch, Al Marino and Devin Ogden — shared their perspectives on what’s happening, and what may happen soon, in their respective sectors. 

Retail tenants, retail investment, land development 

“Because so many people are moving here, retailers have their foot on the gas; they’re not going to slow down even though there are issues of labor,” explained Hume, with Cushman & Wakefield Pacific. “They are not going to let that stop them because they know we’re going to work through this.” 

When asked where the sector is going, Hume responded: “The thought of me going from east Boise to Eagle Road, you have to plan for that now; it’s not something you just do lightly anymore…we’re going to start maybe sticking closer to home,” particularly if amenities and retail are close by.  

“And,” she continued, “I think you’re going to start seeing retail being more rural instead of urban…it’s going to be a bit more neighborhoody, so everyone has services close by their home.” 


“It’s been a wild ride,” said Ogden, with Colliers. “We’re hitting puberty, is what I like to tell people, because there’s so much different change going on right now and it comes from a lot of different variables.” 

Part of that, he said, is due to the current growth, and the trajectory stakeholder companies are looking at, stating “long term, this is a good play (for investment).” Headquarters may not change state, he added, but growth would be good in intermountain states such as Idaho.  

Those coming in, Ogden said, are coming in big. 

Ogden credits some of that to the growth in e-commerce, stating that we’re seeing the tip of the iceberg as far as demand for distributions. Another part of that is access to capital that wasn’t there before.  

“There’s going to be a whole lot of product coming online to meet our 1.2% vacancy,” he said, acknowledging challenges around land availability and needs being met around infrastructure and utilities. 


Lynch, with Roundhouse, shared how the number of multifamily units has changed over the past two decades: 

  • 2000s = 24,000 units 
  • 2010 = 29,000 units (approximately) 
  • Today = 44,000 units 

Most of that increase, Lynch explained, occurred during 2015-2020, with the twofold reason of population growth and being “historically undersupplied” in the market. 

He added, “There’s still a deficit relative to the total population.” 

Renter demographics have also changed, according to Lynch, who said he has seen 75% of renters in the past decade being “high earners,” and they seek amenities, services and other conveniences not sought after by other renters. 

Based on current estimates for the next five years, Lynch, among others, is preparing to see around 18,000 people enter the Boise metro every year, requiring 2,600 multifamily units per year.  

One of the remaining needs, he underscored, is infrastructure, and that is roads and sewer systems to transportation and airport services. 

Office Space 

Al Marino, with TOK Commercial, said he is confident that people are going to continue returning to the office for face-to-face interaction “like we are here today,” and part of that may be through new, and increasing, sub-leasing opportunities. 

“We set a record in the history of our valley office absorption last year; we did $1.2 million in net absorption,” he said.  

Marino also pointed out, in addition to national companies coming in to have an Idaho presence, many local companies are utilizing the sector as well; nine of the top 10 office deals last year were local companies. 

“Of all the things going on (around) COVID, it’s really the one that’s maybe a little more mysterious,” Marino added, and current vacancy is at about 5.5%…between today and 2024, “we have no new product coming online in downtown, yet there’s this growth and demand.” 

“A lot of the companies that are coming here wanted to come here because of our conservative approach to government spending and not going into debt,” Marino also said, and that also feeds into the infrastructure issue, “because we’re not going into debt to build roads and things.” 

Money in the market 

“If y’all are data geeks like myself, you’ll notice that at the beginning of ‘21, our inflation or CPI was right around 1.5%; this last measure, just last month, was over 7%; that speaks to (issues like supply chain breakdowns),” said Jost, with Zions Bank. “Even locally, if you look at the Western Region CPI, that was 12.4% I think end of last year; this last month was over 7.7%; so our region is experiencing it like the rest of the states.” 

“The other thing we think about is where rates are going; the short answer is they’re going up, and they’re going up probably starting next month),” Jost continued. “There’s just so much inflation in the system right now that there needs to be a little bit of a break and I think that rate increases do that.” 

The panel was moderated by Ryan Cleverley, with BVA Development. 

Former Idaho Gov. Dirk Kempthorne delivers the keynote speech during BOMA Idaho’s annual commercial real estate symposium. Photo by Catie Clark

Advice from a former governor: ‘Don’t take it for granted’ 

For its keynote presentation, BOMA Idaho asked former mayor of Boise, governor of Idaho and Secretary of the U.S. Department of the Interior Dirk Kempthorne to share his insight into the Boise area, then and now. 

“That was excellent panel…It was pragmatic, practical and realistic,” Kempthorne began. “As I look out at this very impressive audience…the sheer numbers, but also, it’s youthful. I think they wanted to bring an elder to come tell you about where we came from,” he said to audience laughter. 

Kempthorne described that since the 1960s, Boiseans were promised redevelopment of downtown, making it a beautiful and dynamic area with a mall. 

“Well, we had years of tearing down buildings and not replacing them. We replaced them with gravel parking lots that took up entire city blocks,” Kempthorne said. “This whole area here, the convention center, everything you see outside, other than (the) US Bank core building, was all a sea of gravel for years, for many, many years. It divided this community bitterly.” 

Of course, downtown Boise, from its high rises to its niche shops and eateries, looks very different, and has attractions from public art to the center for birds of prey. 

“Right now, Boise is vibrant; Idaho is vibrant. Many of the communities that surround us and throughout the state are vibrant. Therefore, we’re experiencing the growth that this wonderful panel discussed,” Kempthorne said. “So, why am I mentioning all these examples of the things that make (Boise) vibrant? It makes us attractive.” 

“This is what I want to say to you,” he continued. “How many of you have heard people say Boise is what Denver was 30 years ago; Boise is what Portland was 30 years ago? Do you want to become the next Portland? “It’s suggested that there’s a tipping point that when a community reaches 300,000 to 400,000. It’s a critical time.” 

At nearly 240,000, Boise itself is fast approaching that potential tipping point. 

“We need to be thinking long range…and Ryan, you said, ‘What should we be doing?’ I would suggest you do the same thing, and the topic would be the tipping point. And how do we make sure we tip the right way. And, include your city officials,” Kempthorne advised. 

To close, Kempthorne said: “I hope you get the theme. We have something precious here. We’re going to continue to grow and we’re going to continue to reach a tipping point. So, be part of it. Know that with that which is positive is a responsibility that we do not take it for granted, because if we took things for granted, this would still be a gravel parking lot. 

“And, our motto in Idaho is ‘Esto perpetua:’ Let it be forever. So, that’s what I’m going to leave with you. We have something great going on here; esto perpetua.” 

A spotlight on development & construction trends, technology & infrastructure 

In addition to its local market forecast and keynote presentations, BOMA Idaho also organized two panel discussions (held concurrently) to dive deeper into some of the topics discussed earlier in the event.

The BOMA panel on 2022 Development and Construction Trends. From left to right: Scott Schoenherr, Clay Anderson, Shellan Rodriguez, Neil Nelson, Jeremy Barber, and Scott Sunday. Photo by Catie Clark.

The 2022 Development & Construction Trends panel was moderated by Scott Schoenherr of Rafanelli and Nahas. The panelists were Neil Nelson of Engineered Structures Inc. (ESI); Jeremy Barber of the HC Company; Clay Anderson of Colliers; Shellan Rodriguez of SMR Development and Scott Sunday of Idaho Pacific Lumber Co. 

There were three themes that repeated themselves in various forms by the panelists, and those were the labor shortage as a major contributor in rising costs, the housing crisis and the growing presence of out-of-state institutional investors coming in Idaho, and the growth of housing in the multifamily and build-to-rent home. 

Some highlight quotes include one “Debbie Downer” from Schoenherr: “We’ve got 23,000 fewer employees on the payroll now in Idaho than we did at the beginning of the pandemic at a time that business is booming. And most people (or companies) in this room are trying to hire people right now — yet we’ve got fewer workers out there.” 

Nelson remarked: “In terms of workforce development, craft development is substantially worse than it was two years ago…The only fix that I see short term is increasing wages. That obviously adds to project costs. And that makes it challenging when you combine manufacturing and supply chain issues…When you combine the lack of trades with supply chain issues, that’s really where it’s at: schedules are getting extended, which is obviously hurting the development overall. As long as we’re still at a five-day dollar wage differential with the surrounding states…and we have out-of-state contractors coming in and hiring our Idaho workforce and taking them to the West Coast, we’re going to continue to have this problem.” 

Anderson remarked: “We see cap rates continue to compress…we’d love to say things like cap rate compression just means prices are going up. We continue to see prices go up. It’s basically driven by a lot of money coming in from outside investors, institutional investors; it seems I can’t think of the last acquisition that we’ve seen from a local developer or investor team…We took on (the sale of) a larger project called Indigo, 336 units in South Meridian…(out of) the top 20 bidders, 18 of the 20 were new to market. So, not only were they not in state, but they hadn’t even been here before.” 

Speakers making up the second panel were Rebecca Arnold, with W.H. Moore Company (and a former Ada County Highway District commissioner); Adam Richins, with Idaho Power; Celynda Roach, with Sparklight and Matt Stoll with the Community Planning Association of Southwest Idaho (commonly called COMPASS). The discussion was moderated by Don Day, with BoiseDev. 

From roads to power and broadband fiber, the panelists shared both unique and overlapping experiences, and their takeaways. 

Two of the recurring themes were that partnerships are crucial, and current funding mechanisms are being discussed. 

The Infrastructure & Technology panel. From left to right: Don Day, Celynda Roach, Rebecca Arnold, Matt Stoll and Adam Richins. Photo by Alx Stevens

Richins kicked off the discussion, stating that while Idaho Power was prepared for the growth, it was not prepared for the supply issues. However, Richins said, “We’re keeping up,” partially by stockpiling supplies. 

It’s no secret transportation wasn’t prepared, and it hasn’t been for decades. Stoll commented that transportation has to react to other factors, such as communities changing land use designations. And, “Things are getting better.” 

When it comes to roads, Arnold said, Idaho has to discuss impact fees and the gas tax — such as how hybrid cars are affecting it as a revenue source. The former is largely up to individual cities or counties; the later will rely on the Legislature. 

When Day asked, “How do we tie that knot to make sure that this place doesn’t slide back to that time that (former) Governor Kempthorne talked about in the ‘80s, when there was disinvestment,” Arnold responded, “You have to figure out how to increase funding…You also have to make sure that you’re mindful of how the money’s being spent.” 

Once Sparklight became a publicly traded company, leaders felt it could go after new capital, which will, ideally, help underserved Idaho communities, Roach said.

Some of that fiber could be available to other providers as well, according to Roach. 

“There isn’t one single entity that could go across the entire state or across all of Ada County for that matter, and provide services,” she said. “We have to partner.” 

The (informal) IBR best exhibit award 

Idaho Business Review’s informal best exhibit/best swag winner was difficult to pick, since the golf chipping competition, the basketball toss and the nerf-pistol range were all fun and interesting. The winner was NWESI of Boise, with the festive and enthusiastic Po’okela McKeague with his spin for your swag prize wheel.

Danielle Montgomery of TOK wins a Starbucks card at the NWESI spin-for-your-swag wheel run by Po-okela McKeague of NWESI’s Boise office. Photo by Catie Clark

— Catie Clark contributed to this article.