Commercial real estate market remains ‘vibrant’ during pandemic

BOISE, Idaho – Three main areas are used to measure the health of our commercial property market, retail, industrial and office space.

Idaho has a much healthier market than neighboring states.

“We’re doing a lot better than most of the country, there are definitely vulnerabilities, but in general, when you’re in a global pandemic somewhere I think you want to be in Boise Idaho,” said Michael Ballantyne. TOK commercial managing partner.

Office space has slowed during the pandemic as it is not certain how much office space will be used after the pandemic.

“When the pandemic first hit in March, many companies were in big trouble. We had a significant number of tenants asking for rental concessions and we had a significant number of crimes. From March to December the crime rate fell by 70% . “Said Ballantyne.

TOK Commercial recently researched the Boise subway market and found that leasing activity was down 20% over the past year, but revenue was up 65%.

“From a financial perspective, the borrowers we deal with are very healthy and looking good with a cautious look to the future to see what lies ahead,” said Todd Cooper, president of Idaho First Bank.

TOK’s study found that retail land sales are still strongest and unchanged between 2019 and 2020. Office space is the second in land sales and is almost connected to industrial space.

“We’re parody on the office side. Retail has been surprisingly strong given the so-called Amazon effect, but the industry is really struggling with a shortage of inventory,” Ballantyne said.

The study also assessed how much office space is used. The Boise Metro is using 85% of the available space and 15% is empty. The pandemic also failed to slow development, the 11th & Idaho Street construction project continued during the pandemic.

“We started in August (2019) so we got through the whole pandemic that we just started taking our step in. I have a picture of the company when we installed the last bar, and that was in March So that was exactly when the pandemic started and then we all went in masks so most of the construction work was done during the pandemic. We were almost done on time, we’re a bit late but not much, “said Scott Schoenherr, partner at Rafanelli & Nahas.

How healthy is our commercial real estate market?

“We were very encouraged and at times surprised to see the resilience of the market. Occupancy has remained high, rental income has remained very strong, and we are still seeing a healthy, dynamic real estate market today,” said Cooper.