Unanchored vacancy increased 100 basis points compared to the end of Q1, rising from 4.7 to 5.7 percent. This is the highest level unanchored vacancy has been in nearly two years. The uptick in unanchored vacancy is due to a rise in supply considering over 50,000 square feet of speculative product came online in Q2. This brought the mid-year spec total to 99,800 square feet.
Our investment clients enjoy access to off-market listings, investment market updates, and the first look at investment offerings we bring to market. : Our team achieves our investment clients' goals and represents their interests as we implement representation strategies for their commercial real estate requirements. Our experienced professionals are specialists in the investment market and are equipped with extensive market data and tools for financial analytics.
Emerging technologies, production and workflow processes, distribution, access to supply and labor, warehousing, and supply chain operations can be optimized with the right real estate solutions. We can help you find the right industrial space for your business.
"Industrial development will continue to flourish across Idaho with much industrial space currently under construction and expected to deliver before the end of 2024. The rise in quality space in the market has ultimately kept lease rates at record highs."
- Chris Pearson
The Commercial land market in the Boise MSA has benefitted from the stabilization of economic conditions and is faring better in 2024 than it was a year ago when uncertainty caused developers to put a pause on acquisitions. The number of reported commercial land transactions was up over 50 percent from the first four months of 2023. Industrial land continues to be of particular interest with consideration from the last 12 months up over 65 percent from the previous 12 months. Consideration for retail land increased during this time as well, up 28 percent. As for the office sector, land consideration has remained relatively flat with most interest by owner users.
The allure of commercial real estate brings opportunity to many investors, offering a potential steady stream of income with the ability to maximize long-term capital appreciation. While the rewards can be substantial, navigating this dynamic landscape requires a keen understanding of factors that influence profitability.
Return on investment (ROI) serves as a crucial benchmark for evaluating the profitability of any commercial real estate venture, measuring the net gain an investor realizes relative to the initial investment cost. While a baseline ROI of seven percent per year is generally considered good, this figure can fluctuate based on several key factors. The type of property, its location within a specific market, prevailing economic conditions, and individual investment goals, all play a significant role in determining what constitutes a satisfactory return.
High economic uncertainty resulted in the multifamily investment market seeing a major shift in 2023 compared to previous record breaking years. Based on disclosed transactions, only 10 multifamily properties traded in 2023 which is down 55 percent from 2022. Prices were up slightly from 2022, with the median price per door in Ada County reaching $288,798 and $251,902 in Canyon County. Three of the six transactions in Ada County sold above $300,000 per door. Two of these deals went under contract during the peak of 2022, but extended due diligence pushed the closings into 2023. Based on available listings, the start of 2024 has seen a significant decline in pricing with the median price per door in both Ada and Canyon County at $200,000.
Understanding the jargon of commercial real estate
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The Office market slowed in Q1 with the number of transactions down 4 percent from Q1 2023. Lease rates and vacancy remained healthy in the first quarter of the year. Overall average lease rates held at $20.50 per square foot (FLSV, Annual) while average Class A rates jumped 3 percent from Q4 to $24.75.
Boise Office
250 S 5th Street, 2nd Floor
Boise, Idaho 83702
Main Phone: 208.378.4600
Nampa Office
16150 N. High Desert Street, Suite 200
Nampa, Idaho 83687
Main Phone: 208.378.4600
Twin Falls Office
195 River Vista Place, Suite 204
Twin Falls, Idaho 83301
Main Phone: 208.944.9694
Idaho Falls Office
1135 Pier View Drive, Suite 120
Idaho Falls, Idaho 83402
Main Phone: 208.227.8148
Coeur d'Alene Office
3322 N. Grandmill Lane
Coeur d'Alene, Idaho 83814
Main Phone: 208.449.1908