2010 Global Market Report - NAI Commercial Real Estate

Boise, IdahoSoutheast (Idaho Falls/Pocatello), IdahoContactNAI Pinnacle+1 208 947 0019Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage IncomeMedianHousehold Income631,645740,193306,935$66,650$53,925Commercial Real Estate in the Boise Metropolitan areaexperienced high vacancy rates and decreasing lease rates.Unemployment has risen but is still below the nationalaverage. The high-tech sector has stabilized and mayincrease in 2010. Boise’s health care sector is growingalong with alternative energy. Retail, office and industrial aredown. Residential development has stopped. Much neededhighway work is providing economic stimulus to the area.Boise is still rated one of the best areas in the country tolive, work and start a business (Forbes), as reflected by thedramatic increase of company inquiries. With an educated,employable workforce, Boise State University and a greatquality of life, we see an upswing occurring in all markets in2010 except residential development. The industrial sectorhas been hit hard and vacancy rates have reached 11%.Lease rates are similar to the mid 1990s at around $0.32to $0.48/SF.Vacancy in the office sector is continuing to rise with anoverall 19.5% vacancy rate. Vacancy rates throughout thesubmarkets are ranging from 7.5% vacancy Downtown toover 25% in the Southwest Boise market. New constructionand owner occupied sales are down more than 50% fromlast year. Multifamily vacancies are under 8%, reflecting anincreasing market sector. Fully leased investment propertiesare still hard to find and when found carry capitalizationrates equivalent to national norms of mid 7% to high 8%.Retail is still location specific. An overall vacancy rate of 14%represents an increase over 2008. The big box retailers thatclosed are replaced by retailers new to the area, whichspeaks well for the vibrancy of the Boise Metropolitan Area.Owners in all sectors will continue to offer aggressiveconcessions such as free rent, lower rates, and increasedTI allowances.The Boise Metropolitan Area is once again poised to grow in2010 driven by new jobs from relocated companies. Retailand industrial sectors will increase first, followed by officeand residential. Quality of life will still be our driving forcefor 2010.ContactNAI Commerce One RealEstate, LLC+1 208 525 8088Metropolitan AreaEconomic Overview2008Population2013 EstimatedPopulationEmploymentPopulationHouseholdAverage IncomeMedianHousehold Income122,265134,83855,247$56,740$52,207Eastern Idaho is uniquely positioned to continue its steadygrowth and weather the economic storms facing the nation,with an economy fueled by a well-educated workforce,energy, medical technologies, agribusiness and tourism. InIdaho Falls, the strategically located 400-acre Snake RiverLanding development opened its Central Valley, an integralpart of the master-planned community that includes over 30acres of green space, walking paths, cascading waterfallsand a 3.65-acre lake.Plentiful recreation opportunities abound in the area, alongwith easy access to world famous destinations like JacksonHole, Grand Targhee and Yellowstone. Pocatello is a strategicallylocated logistics hub that is also home to the state'spremier health research university and a variety of new retaildevelopments, including Costco. Rexburg has benefited fromthe continued expansion of BYU-Idaho, led by the formerDean of the Harvard Business School.Eastern Idaho provides an abundance of opportunities forenergy related companies, including commercialization programsbetween the Idaho National Lab and private industry,and an increasing number of research parks and incubators.The INL employs over 7,500 scientists, researchers andsupport staff, providing economic stability in the region.Idaho is one of the top four states in the nation in green jobgrowth, with eastern Idaho being very attractive due to itsvibrant business environment, low cost of living, industriousworkforce and favorable local government support. Pocatellowas selected as the location for Nordic Windpower’sNorth American manufacturing facility because of its advantageouscost of operations, excellent workforce andcentral location to potential customers and transportation.Also in Pocatello, the Hawaiian company Hoku Scientific, iscontinuing work on its $390 million polysilicon plantscheduled to be finished in 2010.Areva’s $2 billion Eagle Rock uranium enrichment facility,located west of Idaho Falls, is slated for completion in 2014.According to a study by the Regional Development Alliance,the project could bring up to $5 billion in economic activityand create 5,000 direct and indirect jobs during construction.Total PopulationMedian Age34Total PopulationMedian Age32Boise At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIALBulk WarehouseManufacturingHigh Tech/R&DRETAILDowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$$$$$$$$$$20.0016.008.0017.5012.006.002.643.725.529.007.0012.0019.00$$$$$$$$$$$$$25.0021.0014.5023.0019.5015.005.166.2412.2321.0019.0024.0028.00$$$$$$$$$$$$$23.5017.5012.0021.0014.5010.503.904.988.8816.0014.0018.0022.0010.0%5.5%7.5%15.0%18.5%21.0%11.0%5.7%15.4%8.5%25.0%10.4%8.0%DEVELOPMENT LAND Low HighOffice in CBDLand in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-parkRetail/Commercial LandResidential$ 1,004,400.00 $ 1,306,578.00$ 206,910.00 $ 917,650.00$ 152,460.00 $ 315,810.00$ 128,066.00 $ 384,199.00$ 128,066.00 $ 866,844.00$ 15,900.00 $ 49,800.00Idaho Falls/Pocatello At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)N/A N/A N/A N/AClass A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIAL$$$16.0011.00N/AN/A10.50$$$18.0013.00N/AN/A14.00$ 17.00$ 12.00N/AN/A$ 13.0010.0%12.0%N/AN/A10.0%Bulk WarehouseManufacturingHigh Tech/R&DRETAIL$$$3.004.806.00$$$6.506.507.00$$$4.506.007.005.0%5.0%5.0%DowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$9.0011.009.0028.00$$$$12.0028.0017.0040.00$ 10.00$ 16.00$ 15.00$ 32.0018.0%14.0%18.0%2.0%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBDLand in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-parkRetail/Commercial LandResidential$$$$$$217,000.00217,000.0075,000.0040,000.00150,000.0015,000.00$$$$$$435,000.00435,000.00150,000.00150,000.00650,000.00100,000.002010 Global Market Report ■ www.naiglobal.com 88