Retail Real Estate Overview:  Total vacancy remained flat at 12.9% for the third consecutive month, while Unanchored vacancy declined from 21.8% to 21.6% in November. This is the lowest Unanchored vacancy has been since mid-2008. After the opening of the new Edward’s Theater in Nampa, net absorption is positive year-to-date at 26,000 SF. This is notable progress for the Retail sector, which had significant negative absorption in 2009 (-360,000 SF). Welch Music moved from Boise to Meridian, occupying 5,000 SF along Fairview. Vacancy in Meridian is now only 6.7%. The recovery of the Retail market is certainly underway, but will take time as the recession had the most immediate impact on this sector. There are still nearly four years of projected supply.

Office Real Estate Overview:  Total vacancy and Multi-tenant vacancy remained flat at 16.0% and 21.2% in November. Nearly 10,000 SF was leased to Bodybuilding.com in Meridian, putting that submarket’s vacant at 17.8%, its lowest point since early 2008. Vacancy has also been trending downward in Nampa (15.5%). A 16,000 SF building was vacated on Emerald Street, pushing vacancy in the Central submarket to a new historical high (20.1%). Lease rates continue to decline with asking rates averaging $14.05 per SF. This is down from $17.00 just two years ago. Projected supply is currently 34 months. Downtown Boise and Meridian have the lowest supply at just over two years. Garden City and Central Boise have an estimated four years of supply.

Industrial Real Estate Overview: Total vacancy decreased from 11.8% to 11.6% and Multi-tenant vacancy dropped from 22.1% to 21.8% in November. This is the lowest that Total vacancy has been since February. Motive Power leased 22,800 SF on Boeing Street, reducing vacancy in the Airport submarket for the 3rd consecutive month (7.8%). Other submarkets are also experiencing a downward trend in vacancy: Central Boise (9.7%), Southwest Boise (16.3%), Nampa (17.6%), and Caldwell (17.8%). In contrast, a 35,000 SF building was vacated on Sawyer Avenue and vacancy in Garden City is now at its highest recorded level (8.2%). Average asking rates have decreased slightly this year, from $0.44 to $0.43 per SF NNN. Actual rents have remained flat at $0.38 per SF.

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