Retail Real Estate Overview: Total vacancy increased from 13.9% to 14.3% in March, setting a new historical high for the Boise market. This is the first time that Retail vacancy has surpassed 14%. The rise in total vacancy is due to Macy’s closing a 118,000 square foot store in Downtown Boise. However, unanchored vacancy declined for the fifth consecutive month, falling from 23.9% to 23.8%. Net absorption finished the quarter at -206,000 SF. This is a slight improvement from the 1st quarter of 2009. Also, excluding the closures of the Downtown Macy’s and Sam’s Club in Nampa, absorption would actually be positive year-to-date. Those two closures have taken a toll: vacancy in Downtown Boise is now 23.3%, while Nampa has its highest recorded vacancy at 16.9%.
Industrial Real Estate Overview: Vacancy increased from 11.3% to 11.7% in March, returning to the same level it was in January. Despite the increase, vacancy is currently lower than it was a year ago. Vacancy has steadily increased in Central Boise (13.6%) while Caldwell’s vacancy has declined to 14.9%, its lowest level since mid-2007. A 51,000 SF warehouse was vacated on Five Mile Road, pushing West Boise’s vacancy over 13%. A handful of 10,000+ SF vacancies resulted in 1st Quarter absorption falling to -55,000 SF. Q1 2009 absorption was significantly worse, however, at nearly -500,000 SF. Asking rates saw a slight increase in Q1 2010, moving from $0.44 to $0.45 (NNN rents). This increase is due to lower priced industrial spaces being leased up.
Office Real Estate Overview: Direct vacancy increased slightly from 15.6% to 15.7%, while Multi-tenant vacancy remained flat at 20.1% in March. Both vacancy rates are at historically high levels. Vacancy has steadily declined in Meridian (20.0%). Although it remains above the market average, Meridian vacancy is now at its lowest level since mid-2008. Vacancy is on the rise in Central Boise (18.1%) and South Meridian (18.2%), where the 15,800 SF VengaWorks building is now available for sale. New vacancies in West Boise pushed its vacancy rate to 21.1%, the highest its ever been. Net absorption for the 1st Quarter of 2010 was negative (-19,000 SF), but was a major improvement from Q1 2009, which saw nearly 300,000 square feet of negative absorption.
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