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IRR-Boise Mid-Year Viewpoint 2015 Local Market Report - Retail

07/31/2015
Published By: Integra Realty Resources

Market Commentary

The Boise metro area retail market continued to improve through 2014, with net absorption exceeding 336,000 sq. ft., driven by new, anchored shopping centers in the Meridian and Nampa.  However, second-tier locations are still facing considerable competition, with average vacancy rates in the mid-teens.  According to major brokerage reports, net absorption in the Boise metro area has been positive since 2010.  Absorption was exceptionally strong in 2012, at nearly 800,000 sq. ft., much of it accounted for by anchor tenants in new shopping centers such as Village at Meridian (141,200 sq. ft.), Eagle Island Marketplace (177,800 sq. ft.), and Gateway Marketplace (63,000 sq. ft.), all located in the fast-growing Meridian submarket. 

In 2013, net absorption decelerated to 517,000 sq. ft., again most of it driven by large users.  For 2014, net absorption decelerated to 336,000 sq. ft., again dominated by retail box deals (which accounted for more than 80 %), but the recovery has spread beyond Meridian.  Nampa was the leading submarket for net absorption in 2014, led by three new junior anchors in build-to-suit space at Treasure Valley

The second best submarket in terms of net absorption was Meridian, which logged 121,000 sq. ft.  The only other submarket with more than 50,000 sq. ft. of net absorption was West Boise, which includes the Boise Towne Square Mall area.  Clearly the anchor tenants in new shopping centers are driving net absorption.  Retail rents edged up in 2014, marking the third consecutive year of growth.  This is consistent with the overall improvement in the market, including declines in market-wide vacancy (close to the levels that reflect supply-demand balance) and 1.6 million sq. ft. of positive net absorption over the past four years.  However, as of 2015, lease rates remained well below market-peak levels.  This is particularly evident in strip centers and smaller inline spaces; near the 2007 peak of the market, rents in this type of space grew to very high levels, but also resulting in a large correction and high vacancy when the recession hit.  Much of the increase in lease rates is the result of more Class A product entering the market, rather than rent increases in marginally-located centers.  However, smaller spaces are seeing more rental rate appreciation than are larger ones, given that they endured greater declines as a result of the recession.

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Download the full version PDF of this Local Market Report below. It includes graphs and tables.

​ IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.

Release Date07/31/2015 - 20:00

Source

Integra Realty Resources

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