boise meridian eagle kuna nampa caldwell q3 2020 retail · market summary the retail market has...
TRANSCRIPT
Q1 2021 RETAIL
MARKET REPORT
B O I S E M E R I D I A N E A G L E K U N A N A M PA C A L D W E L L
YOUR GUIDE TO THE BOISE VALLEY’S RETAIL MARKET
Information deemed reliable, but not guaranteed. © 2021 TOK Commercial. All rights reserved.
CALDWELL
NORTH
NAMPA
EAGLE
MERIDIAN
SOUTH MERIDIAN
WEST
SOUTHWEST
AIRPORT
CENTRAL
DOWNTOWN
SOUTHEAST
MIDDLETON STAR
KUNA
SUBMARKET MAP
250 S . 5th St reet , 2nd Fl r Bo ise , Idaho | 208 .378 .4600 | tok commerc ia l .com
Q1 2021 RETAIL
MARKET REPORTTo subscribe to our Market Reports, email us: [email protected]
Contributors: Kristi Larson, Taylor Hill & Savannah Willits
191,000 SQ. FEETNET ABSORPTION
9.0%TOTAL VACANCY
$18.00AVERAGE NNN LEASE RATE (ANNUALLY)
RETAIL MARKET
MARKET SNAPSHOT
ANNUAL
ANNUAL
ANNUAL
QUARTERLY
QUARTERLY
QUARTERLY
tokcommercial.com
MARKET SUMMARY
2020 began with a strong start for the Retail market, posting 166,000 square feet of positive net absorption in the first 90 days. However, along with the pandemic came many business closures—especially restaurants – and the
subsequent two quarters posted negative net absorption. However a rebound began in Q4, where the market saw over 400,000 square feet of gross absorption, the strongest quarterly activity since 2013. As a result, net
absorption finished the year at 191,000 square feet. The most activity contributing to the Q4 absorption was the completion of the new Costco at Chinden & Ten Mile (157,500 square feet). The number of transactions completed
in Q4 was also up 28 percent from its lowest point in Q2. Retailers that had delayed business decisions during the spring, at the peak of Boise’s stay home order, began moving forward with deals upon the news of the COVID-19
vaccine’s distribution.
Total vacancy began the year at 8.8 percent, and despite multiple business closures, only ticked up slightly to end the year at 9.0 percent. Unanchored vacancy rose from 6.7 percent to 8.1 percent, however it remains healthy
when compared to historical averages. The Meridian submarket posted the strongest gross absorption as well as the most transactions in 2020. Vacancy in this submarket, despite the new product that has come online, remains
well below the market average at just 6.1 percent.
In the past 12 months, 22 percent of retail activity was driven by tenants new to the Boise MSA. This trend is expected to continue as Idaho remains one of the more business friendly states to operate within. According
to the State Economic Competitiveness Index, Idaho ranks 3rd in the nation for economic growth outlook. This high ranking is attributed to the cost of doing business and ramp up time through permitting and regulations
that companies experience. The largest portion of transactions completed in 2020 was with tenants opening additional locations or expanding into larger spaces (37 percent).
New construction will also be a trend for the Retail market in 2021. There are a number of apartment projects slated to complete construction in both downtown Boise and Meridian, and nearly all of them have retail space
available on the ground floor—as both an amenity to those living in the building and those who work nearby. The 80,200 square foot WinCo at Chinden & Linder is also slated to deliver late in the year.
Throughout 2020, average asking rates continued to climb, with the average rate for the market reaching $18.00 per square foot (NNN, annual). Rent for newly constructed space will likely remain at record high levels throughout
2021 given that the cost of tenant improvements is unlikely to abate in the near future. Overall asking rates will likely remain at their current levels for existing or second generation space.
RETAIL CONDITIONS
RETAIL OUTLOOK
Q4 2020 EXPERIENCED THE STRONGEST QUARTERLY ABSORPTION SINCE 2013.
IDAHO RANKS 3RD IN THE US FOR ECONOMIC GROWTH OUTLOOK.
TAKEAWAYS:
5 t o k c o m m e r c i a l . c o m
VAC
AN
CY
RATE
5%
10%
15%
20%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Total Vacancy: Includes All Buildings Unanchored Vacancy: Excludes Anchored Centers
SQU
AR
E FE
ET
NET ABSORPTION
RETAIL MARKET STATS
CLASS A ASKING RATES are averaging $23.00/SF across the Boise MSA. 20% of LEASES SIGNED in 2020 have been leased for $20.00-$25.00 per square foot.
TOTAL VACANCY rose to 9.4% by the end of Q3, before declining to 9.0% by YEAR’S END. UNANCHORED VACANCY in Meridian remains at 5.3% despite new product coming online.
OVER 400,000 square feet of GROSS ABSORPTION occurred during Q4 2020, turning net absorption to POSITIVE 191,000 square feet.
VACANCY TRENDS
TENANT ORIGIN
37%
24%
22%
17%
Additional Location Local Startup New to Market Moving Location
0%
5%
10%
15%
20%
25%
$0 -$10.00
$10.00 -$12.00
$12.01 -$14.00
$14.01 -$16.00
$16.01 -$18.00
$18.01 -$20.00
$20.01 -$25.00
$25.01 -$30.00
$30.01+
SPACE LEASED BY ACTUAL LEASE RATE
‐400,000
‐200,000
0
200,000
400,000
600,000
800,000
1,000,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
*Based on number of transactions in 2020*Based on number of transactions in 2020
Nearly 120,000 SF leased to tenants who were NEW TO THE MARKET in 2020. LOCAL STARTUPS have increased from 16% to 24% of deals in the past 12 months.
New to market
Local Startup
Moving Location
Additional Location
6 t o k c o m m e r c i a l . c o m
MERIDIAN157, 500 SFOCCUPIED BY COSTCO
CALDWELL BLVD25,800 SFOCCUPIED BY BOISE AUTO CLEARANCE
MERIDIAN18,600 SFLEASED TO SIERRA TRADING POST
SOUTH NAMPA17,700 SFLEASED TO GROCERY OUTLET
CALDWELL BLVD22,400 SFLEASED TO O’REILLY AUTO PARTS
EAGLE19,000 SFSOLD TO B’S ACE HARDWARE
WEST BOISE55,100 SFLEASED TO HOBBY LOBBY
CALDWELL BLVD51,500 SFLEASED TO FIT REPUBLIC
MERIDIAN12,100 SFLEASED TO UNDER ARMOR
RETAIL MARKET ACTIVITY3403 CHINDEN BLVD FAIRVIEW STATION DISTRICT 208
211-301 11TH AVE CANYON PLAZA 931 STATE STREET
THE VILLAGE AT MERIDIAN - RETAIL 1215 12TH AVE MERIDIAN CROSSROADS
7 t o k c o m m e r c i a l . c o m
BOB MITCHELL, [email protected]
DAN MINNAERT, SIOR, [email protected]
CHRIS PEARSON, [email protected]
MIKE [email protected]
PETER OLIVER, SIOR, [email protected]
MIKE GREENE, SIOR, [email protected]
NICK [email protected]
AL MARINO, [email protected]
PATRICK SHALZ, [email protected]
KARENA [email protected]
LAURIE REYNOLDSON CCIM, [email protected]
ZACK [email protected]
DEVIN PIERCE, [email protected]
GAVIN [email protected]
BRIANNA MILLER, [email protected]
MARK SCHLAG, CCIM, [email protected]
HOLLY CHETWOOD, [email protected]
LENNY NELSON [email protected]
MARKET INSIGHT+122 MILLION SQUARE FEET
TRACKED REAL TIME ACROSS IDAHO MARKET
RESULTS18,000 SQUARE FEET
LEASED OR SOLD PER BUSINESS DAY (2020)
REACHAS THE LARGEST CRE FIRM IN IDAHO, WE CAN COVER
REQUIREMENTS ACROSS THE STATE
OUR EXPERTISE. YOUR ADVANTAGE.JOHN STEVENS, CCIMSALES [email protected]
MICHAEL BALLANTYNE SIOR, CCIM MANAGING [email protected]
BOISE OFFICE
2 5 0 S . 5 t h S t r e e t , 2 n d F l r B o i s e , I d a h o | 2 0 8 . 3 7 8 . 4 6 0 0 | t o k c o m m e r c i a l . c o m