Industrial Real Estate Review: Vacancy fell from 11.6% to 11.2% in February, returning to the same level it was at the end of 2010. Multi-tenant vacancy saw an even greater decline, falling from 21.5% to 20.9%. Both vacancy rates are at their lowest levels since early 2009. A new 25,000 SF building on Pine Street in Meridian was leased to Pak West and a 21,000 SF building in Caldwell leased to Powerfields. A church leased 23,000 SF at Fairview Tech Center and Ace Industrial leased an 8,000 SF building on Emerald Street. Vacancy in Southwest Boise (19.1%) has been on the rise. Lease rates have recently declined. The average asking rate is now $0.42 per SF (monthly NNN) and the average actual rent is $0.34 per SF. Compared to the Office and Retail markets, Industrial continues to have the lowest projected supply at 32 months.
Retail Real Estate Review: Total vacancy dropped significantly in February, falling from 13.0% to 12.3%. Unanchored vacancy decreased from 21.8% to 21.6%. Total vacancy is at its lowest level since early 2009. The drop in vacancy is mostly the result of Kohl’s leasing 80,000 SF at Boise Towne Square and DSW Shoes leasing 25,000 SF at Franklin Towne Plaza. Vacancy in West Boise (8.1%) is at its lowest point since 2008. Other notable transactions include Ulta Cosmetics and The Children’s Place leasing a combined 16,000 SF at Treasure Valley Marketplace in Nampa. Overall lease rates continue to decline. The average asking rate is $13.50 per SF (annual NNN). However, rents for Class A space appear to have bottomed, with the average asking rate rising from $14.50 to $14.95 and the average actual rent up from $12.75 to $13.10.
Office Real Estate Review: Total vacancy dropped from 15.7% to 15.5% and Multi-tenant vacancy decreased slightly from 20.9% to 20.8% in February. Total vacancy is at its lowest point since September 2009. Broadview University occupied a new 31,200 SF building along Overland Road and Idaho Elks Rehab leased 15,000 SF at Portico, located at Eagle & Franklin in Meridian. Meridian’s vacancy rate (17.5%) is the lowest its been since early 2008. Vacancy is also declining in Eagle (19.4%), where Adecco recently leased 7,000 SF and a performing arts center leased a 9,000 SF building. Some bank-owned office buildings have sold recently, but they comprise only 15% of all office sales in the past six months. This is in contrast to 50% of office sales being bank-owned properties in the first half of 2010.
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