Office Real Estate Review: Total vacancy increased slightly from 15.5% to 15.6% and Multi-tenant vacancy rose from 20.3% to 20.7% in May. Vacancy has increased steadily in the North/Garden City submarket (17.9%), where the Waterfront Building is now nearly 50% vacant. New tenants in the 805 Idaho Building and Jefferson Place have contributed to a decrease in Downtown vacancy (8.4%), now at its lowest level since late 2009. Vacancy has also declined recently in Eagle (18.7%). Lease rates continue to decline, but appear to be bottoming out. The average asking rate has slipped from $14.05 to $14.00 per SF this year, while the average actual rent has decreased from $12.40 to $12.35. The highest asking rates are in Southeast Boise ($17.00) and Downtown ($19.00 for Class A, $16.50 overall).
Industrial Real Estate Review: Vacancy decreased from 11.4% to 11.2% in May, while Multi-tenant vacancy decreased from 20.0% to 19.7%. This is the fifth consecutive month that Multi-tenant vacancy has declined. It is now at its lowest level since late 2008. Scentsy completed construction of a 107,000 SF building off of Eagle Road in Meridian. Construction is also underway on an adjacent Scentsy building (195,000 SF) slated for completion later this year. Two building sales in the Airport submarket have pushed its vacancy to its lowest point since 2008 (5.8%). Industrial rents have remained flat in 2011. The average asking rate is $0.43 per SF, while the average actual rate is $0.37 per SF. Projected supply for industrial space (32 months) is lower than office and retail. Meridian (18 mos) and Garden City (17 mos) have the lowest supply.
Retail Real Estate Review: Total vacancy dropped from 12.6% to 11.8%, while Unanchored vacancy fell from 21.5% to 21.1% in May. Total vacancy is at its lowest level since early 2009. The decrease in vacancy is mostly the result of the sale of the former Sam’s Club in Nampa. The 136,000 SF building will be occupied by College of Western Idaho. Vacancy in Nampa plummeted from 14.2% to 11.0%. Other submarkets with a recent decline in vacancy include West Boise (8.0%) and South Meridian (13.9%). Projected retail supply is now 38 months, down from a four year supply at the start of the year. While transaction volume has risen, lease rates continue to decline. Overall asking rates have decreased from $13.95 to $13.00, while asking rates for Class A space have declined from $14.50 to $14.00.
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