Rising interest rates and high economic uncertainty resulted in the Boise Investment market seeing a major shift in sales activity in 2023 compared to the two previous record breaking years. Based on disclosed transactions, sales volume ended the year at $416 million. This is down 70 percent from 2022 and the lowest level transaction volume has reached in eight years. Fewer high priced deals traded in 2023 with only six deals over $10 million recorded. In comparison, 25 deals sold over this same dollar amount in 2022. Of the deals that traded in 2023, the industrial sector made up nearly 40 percent of transaction volume with two deals trading for over $20 million.
Until interest rates decline investment activity is anticipated to remain stagnant. A large gap still remains between sellers and buyers as sellers want the record-breaking low cap rates seen in 2020 and 2021, but that is out of line with buyer’s expectations. In addition, with this year being an election year, there is an added likelihood of volatility in the overall economy. However the Boise market appears to be normalizing in the sense that buyers are savvier in where to place their capital. Properties will trade that are well-positioned with strong fundamentals such as single tenant triple net retail investments or a newly constructed Class A multitenant industrial property with high-quality tenants.
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