Retail Outlook for the Boise MSA
Online shopping will continue to have a direct impact on the use of retail real estate. Online sales for Cyber Monday set a record in 2016 as more opt to shop from home. Big box closures will continue into 2017 with Sears at the Boise Towne Square, Macy’s at Nampa Gateway Center, and Shopko at Eagle & Fairview. As consumers continue to seek efficiencies with both time and money, retailers must remain nimble with operations. In some cases, retail and industrial space may merge as retailers add distribution space for easy pickup of online orders.
Lease rates for small shops will likely increase due to record low vacancy in retail strip centers. Mid- and big box space lease rates will be stagnant due to the high number of competing spaces. In many cases, the key for turning these large spaces will be higher tenant improvement allowances and lower rents than in the past. Opportunities to increase both occupancy and lease rates exist for owners who are willing to remodel older centers in desirable locations.
Notable construction projects in 2017 include two new WinCo stores located near the Garrity interchange in Nampa and Overland Road in Meridian. More construction activity is also expected along Broadway Avenue near Boise State University. The Eagle submarket may see an uptick in construction, particularly on State Street, as this area becomes prime for retail development.
*Above is an excerpt from Thornton Oliver Keller's Year End Market Watch. To receive a free copy, email email@example.com.
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