TOK's latest outlook for Eastern Idaho's commercial real estate market highlights important trends for office, industrial, retail and investment properties in 2024. 

Office

The strong organic growth the area has seen will likely continue to drive the demand for future office space. Over half of transactions in 2023 were with tenants opening additional locations, expanding their space, or local tenants starting new businesses

Industrial

Spec development is expected to slow slightly with only a handful of projects slated to deliver in 2024. One notable construction project is Idaho Falls Business Park, where 122,600 square feet is expected to deliver

Multitenant office vacancy in North Idaho ended 2023 at 10.7%. Total office vacancy in the area (includes single-tenant buildings) ended the year at 4.4%.

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It was another banner year for retail development with 303,500 square feet of new construction, up slightly from 2022. The biggest project delivered was D&B Supply’s new store in Caldwell, while the rest of the construction was attributed to multiple single tenant and strip center projects under 15,000 square feet. Multiple grocery anchors have been developed over the past four years, including Winco and Costco in North Meridian.

Rising interest rates and high economic uncertainty resulted in the Boise Investment market seeing a major shift in sales activity in 2023 compared to the two previous record breaking years. Based on disclosed transactions, sales volume ended the year at $416 million. This is down 70 percent from 2022 and the lowest level transaction volume has reached in eight years. Fewer high priced deals traded in 2023 with only six deals over $10 million recorded. In comparison, 25 deals sold over this same dollar amount in 2022. Of the deals that traded in 2023, the industrial sector made up nearly 40 percent of transaction volume with two deals trading for over $20 million.  

According to the US Census Bureau, the majority of Eastern Idaho cities saw population grow by over two percent from 2020. The strongest growth happened in the cities of Rigby and Ammon, with an 8.2 percent increase and a 7.3 increase, respectively. This growth continues to drive multifamily development in Eastern Idaho, as demonstrated by a 62 percent increase in multifamily unit permits from the end of 2022.

Additionally, there are 75,000 students registered each semester between four major universities and colleges within the region, per REDI. This large student population in Eastern Idaho also plays a major role in multifamily development