Idaho Falls, the 4th largest city in Idaho, is finally welcoming Costco. Thornton Oliver Keller’s own Brent Wilson is representing the big-box retailer, who plans on building a 150,000 square foot store at the intersection of Lincoln and Hitt Roads. The facility will also include a 15-30 pump fueling station.
What drives foot traffic, offers landlords an attractive option for anchoring their buildings and is considered by some to be the ultimate amenity that a mixed-use project can offer? In this blog post, Holly Chetwood explores the answer to this question - Food halls.
On April 16th -18th, Holly Chetwood, a member of our retail brokerage team attended the ICSC “Food For Thought” conference in New Orleans, LA.
The conference focused on the evolution of retail real estate and its impact on food and dining. Holly was able to connect with national thought leaders and industry experts in discussions centered on emerging concepts and trends in this retail sector.
The Magic Valley is becoming a hot spot for food processing technology, as more and more food companies expand in the area. According to the Idaho Business Review, Gem State Dairy Products is building a 200,000 square foot asceptic milk plant in Twin Falls, which is set to be completed in 2020. The plant is expected to be three times the size of an average fluid milk plant.
At the close of Q1, unanchored retail vacancy dropped below total vacancy for the first time on record. Unanchored vacancy has been on a downward trend for the last 2 years and is currently the lowest level since 2002.
Total retail vacancy saw an increase in March after the closure of Shopko (95,400 SF) on Fairview Avenue in Boise. Total vacancy is expected to increase even higher over the next couple of months with the closure of the last two remaining Shopko stores – on Boise's Broadway Ave. and in Nampa.
A new company is coming to the Boise market. Ravenswood Solutions, a California-based company that specializes in GPS-based mobile instrumentation systems for the military, is expanding its operations to the Airport submarket, where industrial vacancy is currently 2.6%.
The company is moving into 105,000 square feet of industrial space at 645 East Gowen Road and plans to use the facility to maintain and test equipment. Tenant improvements at the site are currently underway. Ravenswood Solutions expects to be hiring throughout 2019.
2018 was a good year for office construction, which experienced an increase of 62,000 more square feet than in 2017. The top 3 projects contributing to this increase were 27,500 SF at 3302 Valencia Dr. (Bingham Memorial Hospital); 22,973 SF at 1460 Elk Creek Dr. (Connections Therapy); and 35,000 SF at 1207 S. 25th (CAL Ranch).
The Foothills School of Boise (https://www.foothillsschool.org/) purchased the 22,500 square foot former Creamery Building in Downtown Boise last month. The building, located at 9th & Miller Streets, had been vacant since Sage International School moved out in 2016 to their new location on Parkcenter Blvd.
The overall retail vacancy has oscillated in the mid-7 to mid-8 percentage range for the last 2 years. However, the next two months will witness large back-to-back vacancy increases with the closure of the three Treasure Valley Shopko sites. The 95,000 SF Shopko on Fairview will close this March. In April, the Nampa and Broadway Shopkos are also expected to close, totaling 191,000 SF.
In addition to increasing the vacancy rate, these large vacancies will also dramatically decrease net absorption which is currently -83,000 SF for 2019.
Retail CAP rates in the Boise MSA have decreased for the 4th straight year, ending 2018 with an average rate of 6.5%. Single-tenant retail remains in high demand. Inventory of this product is limited, but the assets that are trading are high quality with strong national tenants already established in the Boise market.