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COLLIERS IDAHO BOISE | NAMPA
2014 MID-YEAR | REAL ESTATE MARKET REVIEW
www.colliers.com/boise
20
20
55
55
44
20
S P
leasa
nt V
alley
Rd
Eagle
Rd
36th
St
S Or
char
d St
Eagle
Rd
Chinden Blvd
W Victory Rd
Idaho St19th
St
Blac
k Cat
Rd
Can
Ada R
dCa
n Ad
a Rd
Mcc
derm
ott R
dM
ccde
rmot
t Rd
Ustick Rd
Victory Rd
King
s Rd
Roosevelt Ave
10th A
ve S
North
side
Blvd
Roosevelt Ave 22nd A
ve1st St S
11th Av
eGarrity BlvdRailroad St
Cirrus Dr
Midw
ay R
d
Homedale Rd
Midl
and
Blvd
Laster Ln
Mad
ison
Rd
11th
Ave
N
17th A
ve N
9th St SS In
diana
Ave
Deer Flat Rd Deer Flat Rd
Midl
and
Blvd
Marble Front Rd
N Kc
id Rd
Look
Rd
Farm
way
Rd
Ustick Rd
Farm
er R
d
S Federal Way
Capit
ol Blv
d
Broa
dway
Ave
Resseguie St
30th
St
Main St
Reserve St16
th St
3rd St
W Gowen Rd
Shaw Mountain Rd
Taft St
Chinden Blvd
Wag
ner R
d
Myrtle St
Myrtle St
88
99
1010
1111
1212
1313
1919
11
22
33
44
55
1414
1616
1717
1818
Star
Rive
r Rd
77
State St66
1515
Fort StFort St
For Questions or Additional Information, Please Contact:
CHRISTINA TURNER | RESEARCH COORDINATOR208 472 2860christina.turner@colliers.com
DAVE FERNANDEZ | DIRECTOR OF MARKETING208 472 2868dave.fernandez@colliers.com
11
22
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44
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66
77
88
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Ada County Submarkets Northwest Airport Downtown Peripheral West Bench
North End Central Bench Garden City Eagle
Southwest Downtown Boise Southeast Meridian
Canyon County Submarkets Idaho Center South Nampa Caldwell
Northside Karcher
Downtown Nampa Middleton
1919
1818
1717
1616
1515
1414
1313
2014 MID-YEAR REVIEWCOLLIERS IDAHO
Q2 2014 | COMMERCIAL
All information provided in this report is from sources we deemed reliable. Colliers International makes no representation or warranty as to its accuracy.
GEORGE ILIFF | MANAGING OWNER208 472 2858george.iliff@colliers.com
P. 3 | COLLIERS INTERNATIONAL
4OFFICE Market Review
7RETAIL Market Review
10INDUSTRIAL Market Review
13INVESTMENT Market Review
15LAND Market Review
MARKET REVIEW | Q2 2014 | COMMERCIAL | TABLE OF CONTENTS
17VALUATION & ADVISORY
www.colliers.com/boise
OFFICE MARKET REVIEWCOLLIERS IDAHO
Q2 2014 | COMMERCIAL
MARKET INDICATORS
ADA COUNTY
CANYONCOUNTY
VACANCY RATES
ASKING RATES
The Solitude Building
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
11.3%
7.0%9.3%
11.8%13.3%
16.1%
11.8%
18.9%16.5%
4.7%
13.44%
1.17%
8.28% 8.74%
13.84%
OFFICE VACANCY RATES
Centra
l Ben
ch
Downto
wn Bois
e
Downto
wn Peri
phery
Eagle
Meridia
n
GC/N.End
/NW
Southe
ast
Southw
est
West B
ench
Idaho
Cen
ter
Karch
er
Downto
wn Nam
pa
Norths
ide N
ampa
Caldwell
South
Nampa
OVERVIEWBecause the most desirable submarkets continued to garner the greatest market interest from tenants,
landlords continued to drop concessions, and rental rates began to rise. Lateral movement around the
Treasure Valley continued to prevail, as few new businesses entered the area. With asking rates back at
healthy levels, tenants who signed leases during the downturn did not easily renew at their current locations
and sought alternative sites to remain budget conscious. High building costs meant increased cost for
tenant improvements. NOTABLE TRANSACTIONS
COMPANY Washington Group Plaza
TRANSACTION Sold
SIZE 104,291 SF
LOCATION 720 E. Park Blvd.Boise, ID
COMPANY St. Luke’s Regional Medical Center
TRANSACTION Leased
SIZE 11,080 SF
LOCATION 420 W. Washington St.Boise, ID
TRANSACTION Leased
SIZE 11,468 SF
LOCATION 3501 W. Elder St. Boise, ID
COMPANY Metageek
TRANSACTION Leased
SIZE 10,200 SF
LOCATION 1109 Main St.Boise, ID
COMPANY Boise/Idaho Timber Brokers
TRANSACTION Leased
SIZE 15,000 SF
LOCATION Village at MeridianMeridian, ID
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
OFFICE INVENTORY - (AS % OF TOTAL AVAILABLE SPACE)
Centra
l Ben
ch
Downto
wn Bois
e
Downto
wn Peri
phery
Eagle
Meridia
n
GC/N.End
/NW
Southe
ast
Southw
est
West B
ench
Idaho
Cen
ter
Karch
er
Downto
wn Nam
pa
Norths
ide N
ampa
Caldwell
South
Nampa
14%
18%
6%
3%
14%
4%
9%
22%
5%
1% 0% 1% 2% 3%1%
P. 5 | COLLIERS INTERNATIONAL
MARKET REVIEW | Q2 2014 | COMMERCIAL | OFFICE
Update - Market ComparisonsOffice Market
SUBMARKETBUILDING
COUNTINVENTORY
(SF)DIRECT
VACANT (SF)SUBLEASE
VACANT (SF)TOTAL
VACANTVACANCY
RATE ABSORPTION 2014 YTD (SF)
Central Bench 113 2,239,041 370,543 - 370,543 16.5% 41,558Downtown 101 4,177,362 465,995 7,908 473,903 11.3% (127,089)Downtown Periphery 102 2,115,160 155,048 - 155,048 7.0% 29,141Eagle 62 766,816 71,440 - 71,440 9.3% 1,255Meridian 161 3,225,255 381,169 - 381,169 11.8% 15,062N. End/Northwest/Garden City 60 807,158 107,454 - 107,454 13.3% (38,899)Southeast 54 1,423,104 166,007 63,642 229,649 16.1% 17,073Southwest 56 1,041,867 122,868 - 122,868 11.8% (60,148)West Bench 162 3,112,976 564,034 25,564 589,598 18.9% (105,806)Ada County Total 871 19,019,739 2,404,558 97,114 2,50,672 13.2% (227,853)
Downtown Nampa 65 558,571 27,409 - 27,409 4.7% 18,058Idaho Center 19 227,618 30,595 - 30,595 13.4% 3,190Karcher 44 344,403 4,030 - 4,030 1.2% (2,284)Northside Nampa 9 196,919 16,309 - 16,309 8.3% -South Nampa 48 471,853 41,249 - 41,249 8.7% (15,002)Caldwell 51 500,116 69,195 - 69,195 13.8% (20,157)Middleton 5 83,997 188,787 - - - 2,912Canyon County Total 241 2,413,477 188,787 - 188,787 7.8% (13,283)Market Total 1,111 21,332,218 2,593,345 97,114 2,690,459 12.6% (342,134)
INVENTORY AND VACANCYVacancy for Q2 2014 decreased or was equal to the rate for Q1
2014 in 8 of the 15 submarkets considered in this segment. While
the overall feel in the Office real estate community was that
vacancy rates were tightening, certainly in desirable locations and
“Class A” buildings, new availability as a result of the recently
completed Owyhee Plaza, 8th & Main, and Village at Meridian
caused the total rate to rise slightly in Ada County compared to Q1,
and pushed the overall Treasure Valley amount to 1.2% over last
quarter. In Ada County, submarkets with the greatest decrease in
vacancy were the Central Bench and Southeast, where rates were
16.5% and 16.1% at the end of Q2 2014 respectively. The greatest
increases in vacancy were in Southwest Boise, at 11.8%, and in
Downtown Boise, at 11.8%, where not surprisingly, the
aforementioned new availabilities inflated statistics. In Canyon
County, the biggest deltas were witnessed in the Downtown
Nampa submarket (down to 4.7%), and in Caldwell (up to 13.8%),
where little Office inventory exists and small changes in vacancy
greatly impact the overall total.
With the amount of desirable space shrinking, asking rates
increased across the Treasure Valley. The total average increase
in Ada County was $0.07; and $0.04 in Canyon County. The
60,00040,00020,000
0(20,000)(40,000)(60,000)(80,000)
(100,000)(120,000)(140,000)
Meridian
OFFICE ABSORPTION
Central Bench
Downtown
DowntownPeriphery
EagleMeridian
Southeast
Southwest
West Bench
GC/N.End/NW
CanyonCounty
greatest average asking rate increases in Ada County between Q1
and Q2 of 2014 were experienced in Downtown Boise – at $18.62
FS/FSEJ, all classes – and Eagle – at $15.73 FS/FSEJ, all classes.
In Canyon County, the greatest increases were witnessed in
Downtown Nampa – at $12.36 FS/FSEJ, all classes – and South
Nampa – at $12.29 FS/FSEJ, all classes.
P. 6 | COLLIERS INTERNATIONAL
MARKET REVIEW | Q2 2014 | COMMERCIAL | OFFICE
Update - Average Full Service Asking Rates Office Market
SUBMARKETALL
CLASSES A B C
ALL CLASSES ALL ASKING
RATESCentral Bench $9.80 $14.21 $9.59 $8.99 $10.14Downtown $18.62 $20.94 $16.06 $14.00 $17.99Downtown Periphery $16.73 $18.14 $18.07 $10.37 $14.86Eagle $15.73 $15.95 $15.50 - $15.90Meridian $17.29 $17.40 $15.93 - $15.90N. End/Northwest/Garden City $14.83 $15.26 $13.46 - $13.43Southeast $16.29 $16.60 $16.32 $14.50 $15.58Southwest $11.96 $11.96 - - $11.77West Bench $12.22 $15.70 $11.27 $11.72 $11.85Canyon County $12.45 $13.77 $12.45 $10.50 $12.05Averages $13.88 $15.79 $13.88 $11.51 $13.31
MID-YEAR OFFICE VACANCY & ASKING RATES
$18.00
$16.00
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
25.0%
20.0%
15.5%
10.0%
5.0%
0.0%MY06
MY07
YE06
YE07
YE08
MY08
MY09
MY10
YE09
YE10
YE11
MY11
MY12
MY13
YE12
YE13
MY14
Office Asking Rate Office Vacancy
OUTLOOKThere is a growing shortage in open layout office space as more
companies outside the high-tech, public relations, and marketing
industries adopt the more collaborative floorplan in the Treasure
Valley. Expect to see opportunities for both redevelopment and new
development to meet the demand. The speculative construction
begun in Q2 2014 will likely continue for both the current small
suburban office type and for the evolving downtown condominium
trend.
One Capital Center
Centra
l
Bench
Downto
wn
Downto
wn
Perip
hery Eag
le
Meridia
n
$25.00
$20.00
$15.00
$10.00
$5.00
$0.00
GC/N.End
/
NW Southe
ast
Southw
est
Canyo
n
County
$20.94
$15.95$17.40
$15.26$16.60
$11.96
$15.70
OFFICE AVERAGE ASKING RATES
$18.14
$14.21
www.colliers.com/boise
RETAIL MARKET REVIEWCOLLIERS IDAHO
Q2 2014 | COMMERCIAL
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
8.6%
0.2%
4.4% 5.5%
23.2%
0.8%2.3%
6.6%8.1%
RETAIL INVENTORY
18.1%
2.0% 1.4%
9.3%
3.0%2.4%
0.5%
Centra
l Ben
ch
Downto
wn Bois
e
Downto
wn Peri
phery Eag
le
Meridia
n
Garden
City
Southe
ast
Southw
est
West B
ench
Idaho
Center
North
End
Karch
er
Downto
wn Nam
pa
South
Nampa
Caldwell
Northw
est
OVERVIEWNationally, the Retail real estate market continued to recover more slowly than the U.S. economy. Big box
tenants continued reducing the size of their stores. Moderate consumer spending was attributed largely to
slow wage growth. In the Treasure Valley, vacancy rates remained low, particularly in Class A locations. As
a result, landlords granted fewer concessions. Because building costs also remained high, landlords faced
higher construction costs to meet tenant improvement demands. Higher costs coupled with limited available
space prompted asking rates to trend upwards.
Middlet
on
3.5%
MARKET INDICATORS
ADA COUNTY
CANYONCOUNTY
VACANCY RATES
ASKING RATES
The Shops on Emerald
NOTABLE TRANSACTIONS
COMPANY Sage International School
TRANSACTION Leased
SIZE 42,453 SF & 1.74 Acres
LOCATION Parkcenter Blvd. Boise, ID
COMPANY Chick-Fil-A
TRANSACTION Sold
SIZE 1.18 Acres
LOCATION 8000 Franklin Blvd.Boise, ID
COMPANY Petsmart
TRANSACTION Leased
SIZE 12,372 SF
LOCATION Treasure Valley Crossing Nampa, ID
COMPANY Collister Shopping Center
TRANSACTION Leased
SIZE 11,683 SF
LOCATION 4602-4780 W. State St. Boise, ID
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
3.3%
9.7%
0.7%
6.7%
10.4%9.2%
6.6%
4.2%
7.6%6.7%
8.6%
3.5%
1.6%
5.0%5.9%
3.5%
8.7%
RETAIL VACANCY RATES
Centra
l Ben
ch
Downto
wn Bois
e
Downto
wn Peri
phery Eag
le
Meridia
n
Garden
City
Southe
ast
Southw
est
West B
ench
Idaho
Cen
ter
North
End
Karch
er
Downto
wn Nam
pa
South
Nampa
Northw
est
Caldwell
Middlet
on
8.6%
4.4%
8.1% 9.3%
3.5%
P. 8 | COLLIERS INTERNATIONAL
MARKET REVIEW | Q2 2014 | COMMERCIAL | RETAIL
INVENTORY AND VACANCYThe Treasure Valley vacancy rate decreased from 7.7% in Q1 to
6.5% in Q2 2014. Ada County contributed only a 0.3% quarter-to-
quarter drop, with mixed submarket results. The vacancy
decreases witnessed in the Central Bench (3.3%), Eagle (6.7%),
and Southeast (7.6%) submarkets were met with vacancy
increases in Meridian (9.2%), and in the smaller Garden City
(10.4%) and North End (6.6%) submarkets, where a small vacant
space can have a big impact due to limited inventory. In Canyon
County, vacancy decreases in Downtown Nampa (3.5), Idaho
Center (1.6%), and Karcher (5.0%) submarkets were tempered by
an increase in South Nampa (5.9), for a net -3.1% difference
between Q1 and Q2 2014.
With vacancy on the decline, overall NNN asking rates rose $0.10
between the first and second quarters of 2014. In Ada County, the
Central Bench and Eagle submarkets experienced the greatest
increases, with average NNN rates at $11.54 and $13.75
respectively. Conversely, the Southeast submarket witnessed the
greatest decline, ending the second quarter at $13.39 NNN. In
Canyon County, the Downtown Nampa and Idaho Center
submarkets saw the highest increases, at $9.74 and $18.98 NNN.
The oddly high Idaho Center average was due to $24 and $32
asking rates at Ridgecrest Plaza. The Karcher and South Nampa
submarkets decreased somewhat to $9.38 NNN and $12.76 NNN.
The Treasure Valley negative overall absorption can be attributed
in large part to the C.C. Anderson building becoming available
downtown; the sweeping number of tenants who moved out of the
Meridian Crossroads at Fairview and Eagle and the challenged
Hillcrest Shopping Plaza, which also lost a tenant in Q2 2014.
$20.00
$16.00
$12.00
$8.00
$4.00
$0.00
$11.54
$15.99
$10.00
$13.75
$10.64
$14.21
$17.75
$11.29$13.39
$12.20$13.41
$9.74
$18.98
$9.38
$12.76
$9.54$9.00
RETAIL ASKING RATES
Centra
l Ben
ch
Downto
wn Bois
e
Downto
wn Peri
pheryEag
le
Garden
City
Meridia
n
Northw
est
Southe
ast
Southw
est
West B
ench
North
End
Downto
wn Nam
pa
Idaho
Cen
ter
Karch
er
South
Nampa
Caldwell
Middlet
on
Update - Average Full Service Asking Rates Retail Market
SUBMARKETALL
CLASSES ANCHORED UNANCHOREDFREE
STANDINGCentral Bench $11.54 $14.65 - $11.88Downtown $15.99 - $15.82 -Downtown Periphery $10.00 - - -Eagle $13.75 $18.00 - $13.76Garden City $10.64 - $8.75 $9.17Meridian $14.21 $19.06 $13.97 $13.23North End $17.75 - - $18.25Northwest $11.29 $11.75 - $10.94Southeast $13.39 $10.29 - $15.89Southwest $12.20 $10.31 - $12.71West Bench $13.41 $14.59 $11.23 $12.52Canyon County $11.57 $10.50 $7.79 $14.26Averages $12.56 $13.29 $10.89 $13.49
Eagle Island Marketplace
200,000
150,000
100,000
50,000
0
(50,000)
(100,000)
RETAIL ABSORPTION
Northwest
Southeast
West Bench
Central Bench
Garden City
North End
Eagle
Meridian
Southwest
CanyonCounty
P. 9 | COLLIERS INTERNATIONAL
MARKET REVIEW | Q2 2014 | COMMERCIAL | RETAIL
Update - Market ComparisonsRetail Market
SUBMARKETBUILDING
COUNTINVENTORY
(SF)DIRECT
VACANT (SF)SUBLEASE
VACANT (SF)TOTAL
VACANTVACANCY
RATEASKING RATE
(NNN)Central Bench 61 1,477,031 49,465 - 49,465 3.3% $11.54Downtown 52 1,254,180 122,247 - 122,247 9.7% $15.99Downtown Periphery 40 410,793 2,956 - 2,956 0.7% $10.00Eagle 32 925,140 62,198 - 62,198 6.7% $13.75Garden City 31 752,910 78,349 - 78,349 10.4% $10.64Meridian 113 3,584,685 328,864 1,386 330,250 9.2% $14.21North End 8 179,720 2,461 9,420 11,881 6.6% $17.75Northwest 30 800,804 33,399 - 33,399 4.2% $11.29Southeast 39 1,238,070 94,442 - 94,442 7.6% $13.39Southwest 41 1,724,473 115,699 - 115,699 6.7% $12.20West Bench 79 2,990,700 258,557 - 258,557 8.6% $13.41Ada County Total 486 14,927,713 1,148,637 10,806 1,159,443 7.8% $13.11
Downtown Nampa 31 823,928 28,824 - 28,824 3.5% $9.74Idaho Center 22 1,322,811 20,627 - 20,627 1.6% $18.98Karcher 51 2,662,981 132,750 - 132,750 5.0% $9.38Northside Nampa 4 392,841 - - - -South Nampa 22 716,417 42,408 - 42,408 5.9% $12.76Caldwell 28 972,450 34,170 - 34,170 3.5% $9.54Middleton 10 73,571 6,424 - 6,424 8.7% $9.00Canyon County Total 168 6,964,999 265,203 - 265,203 3.8% $11.57Market Total 654 21,892,712 1,413,840 10,806 1,424,646 6.5% $12.56
MID-YEAR RETAIL VACANCY & ASKING RATES
$18.00
$16.00
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%MY06
MY07
YE06
YE07
YE08
MY08
MY09
MY10
YE09
YE10
YE11
MY11
MY12
MY13
YE12
YE13
MY14
Retail Asking Rate Retail Vacancy
OUTLOOKAs unemployment numbers continue to drop and consumer spending rises, expect the Retail market to experience renewed activity. Retailers with both
effective storefront locations and a healthy online presence should continue to prevail, and thus increase the demand for not only Class A buildings, but
locations as well. Expect rental rates to continue to rise.
Collister Shopping Center
www.colliers.com/boise
Downto
wn
GC/N.End
/NW
20.0%
16.0%
12.0%
8.0%
4.0%
0.0%
Centra
l Ben
ch
Downto
wn Peri
phery Eag
le
Meridia
n
Southe
ast
Southw
est
West B
ench
Airpor
t
INDUSTRIAL MARKET REVIEWCOLLIERS IDAHO
Q2 2014 | COMMERCIAL
Downto
wn
GC/N.End
/NW
20.0%
16.0%
12.0%
8.0%
4.0%
0.0%
7.1%
Centra
l Ben
ch
Downto
wn Peri
phery
Eagle
Meridia
n
Southe
ast
Southw
est
West B
ench
5.4%
0.3% 0.2% 0.5%
11.4%
5.8%5.0%
10.4%
19.1%
Airpor
t
OVERVIEWTraditional Industrial warehouse space leveled out around the $0.45 NNN asking rate at the 2014 mid-year.
While, local companies were seeking to expand into bigger spaces, vacancy rates remained low and meeting
both buyer and tenant requirements remained challenging. Not surprisingly, the limited available space led
to landlords granting fewer concessions. Although there was more competition for product, and asking
rates had increased since the 2012 year end, developers did not begin the much anticipated speculative
construction. Building costs remained high in the first half of 2014, together with a continuation of labor
shortage in key trades. To date, 2014 asking rates have not increased enough to justify building risk.
However, evidence of planning activities did begin in the owner-user sector. Although none of the projects
have yet broken ground, the planning alone is significant because speculative development activity of any
kind has been flat for years.
4.9%6.1%
3.8%0.9%
3.9%
8.2% 7.9%
2.5%
16.7%
INDUSTRIAL VACANCY
INDUSTRIAL INVENTORY
1250 E. Iron Eagle Dr.
MARKET INDICATORS
ADA COUNTY
CANYONCOUNTY
VACANCY RATES
ASKING RATES
NOTABLE TRANSACTIONS
TRANSACTION Sold
SIZE 6.34 Acres
LOCATION 3680 W. Ustick Rd, Meridian, ID
TRANSACTION Leased
SIZE 12,500 SF
LOCATION 925 N. Franklin Blvd. Nampa, ID
TRANSACTION Leased
SIZE 9,980 SF
LOCATION 801 W. Amity Rd.Boise, ID
TRANSACTION Leased
SIZE 17,648 SF
LOCATION 1250 E. Iron Eagle Dr. Eagle, ID
7.6%
P. 11 | COLLIERS INTERNATIONAL
MARKET REVIEW | Q2 2014 | COMMERCIAL | INDUSTRIAL
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
$0.47$0.52
$0.57
$0.40
$0.59
$0.51
$0.41
$0.48$0.45
INDUSTRIAL AVERAGE ASKING RATES
Centra
l
Bench
Downto
wn
Downto
wn
Perip
hery Eag
le
Meridia
n
GC/N.End
/
NWSou
theas
t
Southw
est
West
Bench
Airpor
t
$0.48
INVENTORY AND VACANCYThe Treasure Valley vacancy rate fluctuated very little in the
second quarter of 2014. Ada County increased 1.0% while Canyon
County decreased 1.8% for a net rate of 4.8% – equal to the
vacancy rate at the end of the first quarter. The Airport submarket
showed a jump from 3.3% to 4.9% due largely to the bankruptcy
of private companies and the abandonment of 36,000 square feet.
The West Bench and Southwest submarkets also saw mild
increases, from 8.6% to 10.8% and 5.2% to 6.8%, respectively. In
Canyon County, the Northside submarket retained the highest
vacancy rate at 8.7%.
Asking rates also remained steady. At both the mid-year and year-
end of 2013, the Treasure Valley average was $0.47; a mere one
cent year-to-year and year-to-date difference between the $0.46
NNN average for the first half of 2014. While the Airport and
Garden City/North End/Northwest Boise submarkets exhibited
the largest increases in Ada County, the Central Bench and West
Bench submarkets both showed an $0.08 decrease. In Canyon
County the average rate also dropped slightly by $0.3. The South
Nampa submarket witnessed the greatest increase between
quarters and ended Q2 2014 at $0.46 NNN.
Update - Market ComparisonsIndustrial Market
SUBMARKETPROPERTY
COUNTINVENTORY
(SF)DIRECT
VACANT (SF)SUBLEASE
(SF)TOTAL
VACANTVACANCY
RATEASKING
RATEAirport 112 4,297,818 210,624 - 210,624 4.9% $0.47Central Bench 85 2,630,435 159,562 - 159,562 6.1% $0.52Downtown 13 230,032 8,833 - 8,833 3.8% $0.57Downtown Periphery 34 770,663 7,184 - 7,184 0.9% $0.40Eagle 11 351,896 15,758 - 15,758 4.5% $0.63Meridian 157 4,102,439 181,739 - 181,739 4.4% $0.51N.End/Northwest/Garden City 142 2,191,634 112,870 - 112,870 5.2% $0.43Southeast 97 5,891,114 146,999 - 146,999 2.5% $0.48Southwest 95 1,843,844 196,302 3,104 199,406 10.8% $0.45West Bench 201 7,458,951 478,528 27,567 506,095 6.8% $0.49Ada County Total 947 29,768,826 1,518,399 30,671 1,549,070 5.2% $0.50
Downtown Nampa 22 470,293 - - - - -Idaho Center 72 2,040,907 37,659 - 37,659 1.8% $0.41Karcher 42 2,051,079 16,440 - 16,440 0.8% $0.43Northside Nampa 123 6,051,775 528,064 - 528,064 8.7% $0.41South Nampa 26 817,751 11,728 - 11,728 1.4% $0.46 Caldwell 179 4,951,252 78,390 6,300 84,690 1.7% $0.29Middleton 2 89,824 - - - - -Canyon County Total 466 16,472,881 672,281 6,300 678,581 4.1% $0.40Market Total 1,413 46,241,707 2,190,680 36,971 2,227,651 4.8% $0.46
1,000,000
800,000
600,000
200,000
0
(200,000)
INDUSTRIAL ABSORPTION
SoutheastGC/N.
End/NW
Central Bench
CanyonCounty
West Bench
AirportDowntown
Meridian Southwest
DowntownPeriphery
P. 12 | COLLIERS INTERNATIONAL
MARKET REVIEW | Q2 2014 | COMMERCIAL | INDUSTRIAL
OUTLOOKWhile national activity to adjust supply chains in
preparation for the completion of the Panama Canal
expansion this year will undoubtedly create positive
consequences in the Industrial segment for port cities
and other inter-modal hubs, it remains to be seen if
markets without major transit industries will be affected.
Because the Treasure Valley provides satellite distribution
centers for both Portland and Salt Lake City, it will be
interesting to see if activity at the national level will trickle
down to the Boise MSA. Additionally, demand from
e-commerce and third-party logistics providers, as well
as from traditional retailers and manufacturers has
generated increased activity across the U.S. in the
Industrial segment in a wide range of markets – including
secondary and tertiary metros [Marcus & Millichap]. Again,
it remains to be seen whether or not the Treasure Valley
will benefit.
Locally, continue to look for low vacancy rates to push
asking rates up and potentially stimulate speculative
construction. With more opportunities for new site
selection, Canyon County should experience increased
activity.
Update - Average Full Service Asking Rates Industrial Market
SUBMARKET ALL FLEX WAREHOUSEINDUSTRIAL/
MANUFACTURINGAirport $0.47 $0.38 $0.38 $0.43Central Bench $0.52 $0.51 $0.35 $0.45Downtown $0.57 $0.57 - -Downtown Periphery $0.40 - - $0.40Eagle $0.63 $0.63 - -Meridian $0.51 $0.63 $0.44 $0.46N.End/Northwest/Garden City $0.43 $0.45 $0.38 $0.45Southeast $0.48 - $0.46 $0.48Southwest $0.45 $0.59 $0.42 $0.41West Bench $0.49 $0.57 $0.49 $0.42Canyon County $0.40 $0.47 $0.38 $0.37
Averages $0.46 $0.53 $0.40 $0.42
MID-YEAR INDUSTRIAL VACANCY & ASKING RATES
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%MY06
MY07
YE06
YE07
YE08
MY08
MY09
MY10
YE09
YE10
YE11
MY11
MY12
MY13
YE12
YE13
MY14
Industrial Asking Rate Industrial Vacancy
1.3%
0.6%
29.7%
0.4%2.9%
INDUSTRIAL INVENTORY
IdahoCenter
Karcher Northside Nampa
SouthNampa
Caldwell
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
1.8%0.8%
14.5%
1.4% 1.7%
INDUSTRIAL VACANCY
IdahoCenter
Karcher Northside Nampa
SouthNampa
Caldwell
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
$0.41 $0.43 $0.41$0.46
$0.52
INDUSTRIAL ASKING RATES
IdahoCenter
Karcher Northside Nampa
SouthNampa
Caldwell
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
www.colliers.com/boise
INVESTMENT MARKET REVIEWCOLLIERS IDAHO
Q2 2014 | COMMERCIAL
OVERVIEWGlobally, in the first half of 2014, commercial real estate sales totaled $294 billion*, a 27% increase over the
first half of 2013. The Americas represented the greatest growth. The increase in transactional levels nearly
reached a point last seen in 2006. The contributing factor in 2014 versus prior years was more equity targeting
direct commercial real estate [JLL, Global Capital Flows Report Q2 2014 *preliminary statistics].
Nationally, favorable interest rates and the improved lending environment continued to drive new development
and investment activity. The NREI Investor Sentiment Index held steady at 176, equal to the rate reported at
the end of 2013, which exceeded the previous market high in 2005. The first half of 2014 showed a consistent
decrease in Office, Retail and Industrial vacancies, while the Apartment rate held steady. As expected, rental
rates increased and should continue to rise steadily over the next year in all four segments. Capitalization rates
continued to drop as investors seeking better returns in the real estate market encountered a lack of quality
product to purchase.
Locally, the Treasure Valley continued to experience steady growth, adding over $450 million in new and
completed projects during the first half of 2014. Completed projects included 8th & Main, Trader Joe’s, and the
Owyhee Plaza. Newly approved and under construction projects included: City Center Plaza, JUMP, Simplot
Headquarters , the 951 Apartments, the Depot Lofts, and the Lusk Street neighborhood apartment complexes
– Boise Heights, Rivers Edge, West Sherwood , and Lusk Place. In fact, year to date construction on new
apartment units totaled over 1, 500; over half of which will be located in the Lusk Street neighborhood. Other
projects such as the Owyhee Plaza, the 951 Apartments, and the Depot Lofts will provide additional housing
opportunities in the downtown Boise submarket. The City of Boise also awarded the RMH Company their bid
on the property at 9th and River streets, where plans to bring twenty-six residential condominiums to the
market are underway.
John Alden Building
NOTABLE TRANSACTIONS
COMPANY Orchard Place Apartments
TRANSACTION Sold
SIZE 8.57 Acres
LOCATION 450 Orchard Pl.Nampa, ID
COMPANY St. Luke’s Surgery Center
TRANSACTION Sold
SIZE 21,430 SF
LOCATION 520 S Eagle Rd.Meridian, ID
COMPANY John Alden Building
TRANSACTION Sold
SIZE 50,030 SF
LOCATION 1005 W. Main St.Boise, ID
COMPANY Boulder Creek Apartments
TRANSACTION Sold
SIZE 136 Units on 7.18 Acres
LOCATION 5661-5713 N. Garrett St.Garden City, ID
COMPANY IHOP NNN leased restaurant
TRANSACTION Sold
SIZE 4,900 SF
LOCATION 1420 Caldwell Blvd.Nampa, ID
11.010.09.08.07.06.05.04.03.02.01.00.0
Year-Over-Year Unemployment Change
National Unemployment Rate (June)
Idaho Unemployment Rate (June)
18,000
13,000
8,000
3,000
-2,000
-7,000
-12,000
ANNUAL UNEMPLOYMENT MID-YEAR
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
*201
4
*May preliminary figuresSource: U.S. Department of Labor - Bureau of Labor Statistics
P. 14 | COLLIERS INTERNATIONAL
MARKET REVIEW | Q2 2014 | COMMERCIAL | INVESTMENT
CAPITALIZATION RATESThe national average capitalization rate was around 6.25% at the close
of the second quarter of 2014, which was largely skewed due to heavier
volume in Apartments and Retail. The decreasing trend in cap rate values
was attributed to an expectation that rising rental rates will increase
income. [National Real Estate Investor]
In the Treasure Valley, building costs remained high in the first half of
2014, along with a continuation of labor shortage in key trades. Interest
rates remained low. These factors together created a year-to-date market
that was favorable to sellers. “New money” continued to chase the local
market in search of opportunities for both redevelopment and new
development.
SEGMENT TREASURE VALLEY CAPITALIZATION RATES
Industrial: Very little activity. Averages around 7.5%
Office: Relatively high averages, around 8.25%
Retail: Strong retail centers average in the mid 6% range, The lowest single tenant NNN national credit at 6% or lower
Multi-Family: Average for the period was 6.25%
OUTLOOK• The demand for quality investment properties along with favorable interest rates will continue to keep capitalization rates low. However, an improving job market may push interest rates up.
• The development momentum generated in the last nine months should continue with a surge of more residential housing options in the downtown neighborhood. The submarket remains under-served and demand continues to increase.
• The addition of more Class A office space and the redevelopment of existing Class B office space may attract new tenants looking to move.
• Rental rates may experience a nominal increase in all asset types.
8.0%
7.0%
6.0%
5.0%‘10 ‘ 1 1 ‘ 12 ‘ 13 ‘ 14
APARTMENTS
MID-YEAR AVERAGE CAP RATES
8.0%
7.0%
6.0%
5.0%‘10 ‘ 1 1 ‘ 12 ‘ 13 ‘ 14
RETAIL
8.0%
7.0%
6.0%
5.0%‘10 ‘ 1 1 ‘ 12 ‘ 13 ‘ 14
OFFICE
8.0%
7.0%
6.0%
5.0%‘10 ‘ 1 1 ‘ 12 ‘ 13 ‘ 14
INDUSTRIAL
Source: RC Analytics
www.colliers.com/boise
LAND MARKET REVIEWCOLLIERS IDAHO
Q2 2014 | COMMERCIAL
OVERVIEWTreasure Valley new home building slowed over the first half of 2014. A total of 1,589 single-home permits
were issued in Southwestern Idaho from January through the end of Q2 2014. The permit totals were down
greatly compared to the first half of 2013, when 2,039 permits were issued through the first week of June
– a 22% difference. However, the issuance of new home permits over the last six years remained high.
In Ada County, the six year peak in issued new home permits occurred in Q2 2013, with a 26.8% increase
over the previous quarter, and an 86.1% increase over Q1 2008. In contrast, the 2014 Q2 to Q1 quarterly
increase was merely 1.6%, and only a 40.6% increase over Q1 2008; indicating new home construction
activity slowed compared to the same time last year, but was still strong compared to the depressed activity
six years ago. In Canyon County, while obtained new home permits did not peak in Q2 2013, they were still
the highest they had been since Q1 2008. The trend decreased from Q2 2013 to Q1 2014, but jumped an
impressive 46.4% from Q1 to Q2 2014.
The total number of new and existing homes sold in Q2 2014 vs. Q2 2013 was greater at least slightly in
every select city except Meridian and Kuna, which were down by 133 and 10 respectively. The drop in home
sales in Meridian was great enough to negate the nominal gains in other cities for a net loss of 73 home
sales compared to the same time last year. While the total number of home sales was down compared to
Q2 2013, the level remained much higher than years past.
The mid-year 2014 median new home prices in Ada County were down 11.4% compared to mid-year 2013;
however, they were up from $180,000 in Q1 2014 to $195,000 in Q2 2014 – an 8.3% increase. In Canyon
County the median new home prices at the mid-year 2014 rose 4.6% compared to mid-year 2013, but
dropped from $137,470 in Q1 2014 to $124,900 in Q2 2014 – a 9.1% decrease.
Snake River near Melba
NOTABLE TRANSACTIONS
COMPANY Walter’s Butte
TRANSACTION Sold
SIZE 620 Acres
LOCATION 7830 Warren Spur Rd.Melba, ID
COMPANY Knight Sky Subdivision
TRANSACTION Sold
SIZE 10 Acres
LOCATION 6555 N. Linder Rd.Meridian, ID
Update - Median Home Price by Selected Cities Land Market
ADA COUNTY CANYON COUNTYTREASURE VALLEY
MEDIANBoise Garden City Eagle Star Kuna Meridian Nampa Caldwell Middleton
Q2 2006 $226,541 $224,034 $389,900 $239,000 $193,230 $256,005 $168,125 $148,998 $199,669 -Q2 2007 $238,902 $211,136 $375,000 $285,900 $186,918 $257,427 $164,518 $153,026 $195,000 $225,019Q2 2008 $215,205 $204,815 $378,500 $201,000 $160,000 $220,693 $149,481 $131,686 $176,800 $202,907Q2 2009 $184,397 $160,533 $264,000 $178,522 $137,500 $182,689 $117,396 $101,835 $146,000 $169,527Q2 2010 $159,557 $141,784 $253,500 $145,000 $122,500 $168,949 $99,270 $90,161 $130,000 $143,392
Q2 2011 $150,501 $130,962 $290,000 $134,500 $93,000 $158,392 $80,713 $68,841 $110,000 $132,731Q2 2012 $179,936 $142,929 $312,100 $168,200 $116,250 $174,154 $101,222 $79,148 $140,500 $155,565Q2 2013 $207,821 $175,944 $343,500 $198,190 $146,471 $208,076 $129,980 $109,454 $170,750 $187,067Q2 2014 $223,759 $175,986 $330,000 $249,900 $147,750 $221,479 $138,491 $116,819 $189,246 $198,732
P. 16 | COLLIERS INTERNATIONAL
MARKET REVIEW | Q2 2014 | COMMERCIAL | LAND
$240,000
$220,000
$200,000
$180,000
$160,000
$140,000
$120,000
$100,000 Q2
2006 Q2
2007 Q2
2008 Q2
2009 Q2
2010 Q22011
Q22012
HOME SALES VS. MEDIAN HOME PRICENumber of Homes Sold Median Home Price
Q22013
Q22014
1600
1400
1200
1000
800
600
400
200
0 2008 Q2
2009 Q2
2010 Q2
2011 Q2
2012 Q2
2013 Q2
2014 Q2
Q2 NEW HOME PERMITS VS. MEDIAN HOME PRICESAda County
PermitsCanyon County
PermitsMedian Home Price
Ada CountyMedian Home Price
Canyon County
SUPPLY & DEMANDLand development activity was focused on larger retail, multi-family and
single-family detached projects, as well as smaller infill projects –
particularly in Ada County. In Canyon County, some single-family
detached development activity was seen especially in North and West
Nampa.
OUTLOOKThe national housing recovery is expected to continue. However, capital
regulations on bank lending and failure by Congress to reform Fanny Mae
and Freddie Mac, or to provide a bail out for the FHA will translate into
fewer new housing construction starts. Going forward, in the Treasure
Valley, expect to see continued demand for residential and retail
development land, both on the edge of town and especially infill.
www.colliers.com/boise
VALUATION & ADVISORY SERVICESCOLLIERS IDAHO
Q2 2014 | COMMERCIAL
OVERVIEW
INTEREST RATES
The Federal Reserve announced the end of the third round of quantitative easing (QE3) will occur in October 2014, and as a result, most economists now expect interest rates to increase in 2015. The bond market will likely be ahead of the Federal Reserve announcement and it appears increasingly likely that the market will push 10-year yields above 3% by year-end.
ORIGINATION VOLUME
In commercial real estate, debt outstanding increased in Q1 2014 by $11.1 billion. Banks led the way with 36% of total debt outstanding, followed by Commercial Mortgage-Backed Securities (CMBS) at 21.7%, and Government Agency at 15.3%. Total debt outstanding continued to increase but at a slower rate than the previous two quarters [MBA, Federal Reserve, and FDIC]
COMMERCIAL MORTGAGE-BACKED SECURITIES (CMBS) VOLUME AND UNDERWRITING
Issuance for the first half of 2014 was $25.8 billion, down 2.8% from the first half of 2013 and on-pace to
exceed $50 billion for the year. Credit quality in the majority of 2014 CMBS issuances continued to deteriorate.
As loan-to-value (LTV) ratios increase, debt service coverage ratios (DSCR) fall, and interest-only loans gain
greater market share.
CONSOLIDATION
Continuing the recent local consolidation trend, two banks were acquired by regional competitors: Syringa
Bank was acquired by SunWest Bank for less than $10 million via an FDIC and Idaho Department of Finance
transfer; and Idaho Banking Co. was acquired by DL Evans Bank for $10 million via Bankruptcy court auction.
DL Evans outbid both Banner Bank and SunWest Bank for the business.
VALUATION & ADVISORY SERVICES
New to the Boise Office! Valuation and Advisory Services deliver insight into a property’s fundamentals, its
competitors and the overall market dynamics which, affect value, both now and in the future and include the
following:
• Appraisal Review/Management
• Arbitration and Consulting
• Discounted Cash Flow Analysis
• Feasibility Studies
• Highest and Best Use Studies
• Insurance Valuation
• Investment Analysis
• Lease and Cost Analysis
• Litigation Support
• MHC Practice Group
• Portfolio Valuation
• Single Asset Valuation
• Tax Appeals
P. 18 | COLLIERS INTERNATIONAL
PG. 17
INVESTMENT BROKERAGE
LINCOLN HAGOODAssociate208.472.1667lincoln.hagood@colliers.com
BRYANT JONESAssociate208.472.1663bryant.jones@colliers.com
MIKE CHRISTENSENRetail Associate208.472.2866mike.christensen@colliers.com
LEW GOLDMANRetail Associate208.472.2847lew.goldman@colliers.com
BROOK BLAKESLEERetail Associate208.472.2835brook.blakeslee@colliers.com
JOHN STARRAssociate208.472.2838john.starr@colliers.com
JIMMY ROUMANISAssociate208.472.2840jimmy.roumanis@colliers.com
MIKE PEÑAAssociate208.472.1666mike.pena@colliers.com
INDUSTRIAL BROKERAGE
GEORGE ILIFFManaging Owner & Office Associate208.472.2858george.ilff@colliers.com
MANAGEMENT
STEVE FOSTERAssociate208.472.2834steve.foster@colliers.com
DEVIN OGDEN, CCIMAssociate208.472.1668devin.ogden@colliers.com
RICK SCRUTONAssociate208.472.2851rick.scruton@colliers.com
CLAY ANDERSON CPA,MBA Associate208.489.6177clay.anderson@colliers.com
MATT PALMER Associate208.472.2863matt.palmer@colliers.com
SHANNA RONDEAUTransaction Coordinator208.472.2854 shanna.rondeau@colliers.com
SCOTT FEIGHNERAssociate208.493.5107scott.feighner@colliers.com
GREG MACMILLAN Associate208.472.2841greg.macmillan@colliers.com
JAMIE ANDERSONAssociate208.472.2842jamie.anderson@colliers.com
OFFICE BROKERAGE LEW MANGLOS CCIM,SIORAssociate208.472.2841lew.manglos@colliers.com
LAND BROKERAGE
RETAIL BROKERAGE
PROPERTY MANAGEMENT
MIKE ATTIANI, CCIMDirector of Property Services208.472.2862mike.attiani@colliers.com
PETER DRAPERSr. Project Manager208.472.2869pete.draper@colliers.com
DAVE FERNANDEZDirector of Marketing208.472.2868dave.fernandez@colliers.com
LINDA KINGBroker Assistant 208.472.2863linka.king@colliers.com
CHRISTINA TURNERResearch Coordinator208.472.2857christina.turner@colliers.com
ROBIN RICHARDSBroker Assistant208.472.2857robin.richards@colliers.com
ALEXA SAKOLSKYBroker Assistant208.472.2857alexa.sakolsky@colliers.com
MARKETING & RESEARCH
CANYON COUNTY BROKERAGE
MARKET REVIEW | Q2 2014 | COMMERCIAL | COLLIERS IDAHO
TRACIE HOLSTINEGraphic Designer 208.472.2859tracie.holstine@colliers.com
VALUATION & ADVISORY SERVICES
ANDREW BOESPFLUGSr. Valuation Services Director208.472.2853andrew.boespflug@colliers.com