Woodbury Corp. wonders: what retail apocalypse?

Danny Woodbury doesn’t see much evidence of a retail apocalypse from where he sits, usually in his car, driving from one retail property to the next across Idaho and 14 other western states. He’s the director of leasing for his family’s commercial real estate (CRE) management business.

He had a lot to say about the retail apocalypse going AWOL in Idaho: “Our experience in the Intermountain West and in Idaho, with shopping centers and retail is really divergent from what the national narrative has been over the past five to 10 years. Where if you look at the national narrative, the word that often pops out is apocalypse…that there’s a retail apocalypse, about massive store closures. You hear about dead malls, and that retail is dying.”

Granted, retail in Idaho, especially for some high-profile brands, hasn’t fared all that well. Shoppers are still mourning the loss of some beloved chains like Payless and Dress Barn. Woodbury has experienced something different from the national headlines proclaiming that e-commerce has killed brick-and-mortar retail.

“What we’ve seen in places like Idaho is the exact opposite,” Woodbury told the Idaho Business Review. “It’s actually been one of the star performers in CRE, and has strengthened over that period of time. And coming out of COVID-19, retail had just a fantastic year.”

Woodbury Corporation

Danny Woodbury is part of the Woodbury family that owns and operates the 102-year-old Woodbury Corporation. The Salt Lake City-based firm is one of the oldest real estate development companies in the Intermountain West with a CRE portfolio that stretches across 15 states.

The company’s Idaho holdings include two Class A properties in the Treasure Valley, three more properties in Twin Falls in addition to the Magic Valley Mall, two hotels and three retail properties in Idaho Falls, a shopping center in Blackfoot and student housing in Rexburg. The firm’s holdings in eastern Idaho are part of the strip of almost continuous CRE development along the I-15 corridor that stretched from Rexburg down to Provo, Utah. It includes the development along Highway US-89 in Cache Valley, an area that runs from Logan, Utah north through Preston, Idaho.

Idaho retail foot traffic

Woodbury just may be onto something. According to location data company Placer.ai, Idaho’s retail sector saw a year-over-two-year improvement of 104% for foot traffic to brick-and-mortar retail for all of 2021 when compared to 2019. The year started out slow, showing a slight decrease in January and February 2021 when compared to retail foot traffic in 2019. March 2021 foot traffic caught up with March 2019. After that, every month in 2021 had higher retail foot traffic compared to the same month in 2019.

Idaho retail vacancies

Of course, we all know that foot traffic doesn’t necessarily equal healthy businesses, but Woodbury has some other numbers to back his comments. First, he said he sees healthy retail vacancy rates both from Woodbury properties and other CRE players: “Just now I pulled up the (retail vacancy) report for Boise…and the most recent report in retail shopping center vacancies in Boise trade areas was 4.5%, which is the lowest I’ve ever seen it. If you look at our Idaho shopping centers, they fall in line pretty well with that number.”

CRE data from TOK Commercial Real Estate in Boise backs this. TOK reported strong retail trends for 2021, remarking in its end-of-year report that: “2021 has seen strong retail absorption in each market across Idaho.” The year ended with TOK Commercial reporting overall retail vacancies in Ada County floating just above 5% and 6.6% in the Magic Valley.

Idaho retail sales

Woodbury reported that his retail tenants saw excellent sales in 2021. He gave one example from the Magic Valley Mall. “Retail store sales at our mall in Twin Falls, Idaho, where the retailers are required to report (same store) sales monthly, for 2020 versus 2021…we’re seeing increases of 30% or more. That’s average. So it’s a huge increase. It’s the largest increase we’ve ever seen.”

“Those are really two great data points,” he continued, “where vacancy is decreasing lower than we’ve ever seen it, at least in recent history, and store performances in brick-and-mortar retail with the biggest sales increases…and rents are increasing. Those all tell a positive story.”

‘Four mores and one difference’

“What’s happening here? Why are these groups performing so well?” Woodbury asked. “The way I explain it is there’s three ‘mores’ and one difference. There’s more people, who have more money, who are buying things that cost a little bit more, and they’re doing it in a different way.

“So to break some of those down. For anyone who lives in Idaho, the housing market is exploding. Idaho has been either the fastest or the top-five fastest growing states over the past decade in any given year…so you have more people. And Idaho is experiencing great job growth, so those people have jobs and they’re making more money.”

Woodbury’s difference is that compared to the pre-pandemic period: “People are shopping a little bit differently.” Instead of spending money on trips, eating out or entertainment, “they’re spending it on goods and services locally.” That should be heartening news for Idaho retail.