Over the past 12 months, the market has seen the delivery of more than 4.3 million square feet of new industrial space. This increase in supply has ultimately caused overall vacancy to remain elevated at 8.6 percent. Multitenant vacancy is currently at 23.2 percent, slightly below the record high of almost 24 percent seen at the end of June. Overall months of supply has also increased to 18.7 months, up from 12.6 months at this time last year. 

Capitalization rates have remained relatively flat from the end of 2023, with cap rates in the office, retail, and industrial sectors averaging at or near six percent. Multifamily cap rates have seen a significant jump, averaging 5.9 percent, the highest multifamily cap rates have been since 2016. Average cap rates are anticipated to stay near six percent in all sectors, though more deals are trading in the high six to low seven percent range, most notably in the office and industrial sectors.

Development remains a key highlight for the industrial sector with over 822,500 square feet of new construction completed in Q1. This is a 13.7 percent increase from construction delivered in Q1 of 2023. The majority of development has occurred in Canyon County, accounting for over 59 percent of total construction. In addition, 84 percent of total construction in the Boise MSA is speculative space.

According to the US Census Bureau, the majority of Eastern Idaho cities saw population grow by over two percent from 2020. The strongest growth happened in the cities of Rigby and Ammon, with an 8.2 percent increase and a 7.3 increase, respectively. This growth continues to drive multifamily development in Eastern Idaho, as demonstrated by a 62 percent increase in multifamily unit permits from the end of 2022.

Additionally, there are 75,000 students registered each semester between four major universities and colleges within the region, per REDI. This large student population in Eastern Idaho also plays a major role in multifamily development