How's downtown Boise commercial real estate doing?

We read lots of headlines on how our real estate market is doing great downtown, but being a numbers guy, I want to the know the facts!  Our good friends at Thornton Oliver Keller and Colliers put out great market research reports, and I take particular interest in the bi-annual publications.  Both 2013 mid-year reports came out in July, and I thought I would share some of the highlights I pulled from the reports.

Interesting Downtown Facts

• Office vacancy downtown is increasing (remember my blog from 3/22/13...I told you this was going to happen).  TOK indicates downtown office vacancy went from 6.4% to 7.4%, while Colliers showed it went from 8.5% to 8.7% (I lump their downtown & downtown periphery together).
• Overall office asking rates are decreasing while Class A asking rates are is increasing.  I think this highlights how older buildings are going to have a tougher time fighting for tenants.
• Both reports show our downtown retail vacancy as being super healthy and it probably lies in the 5.5 - 6.5% range.  Average asking rates ~$16.50/SF NNN.
• Our downtown industrial market (wait, do we have one?!) also has a low vacancy, probably in the 5.5 - 6.5% range.  This number is typically always pretty low because the supply is so low.

Now going forward, what do we see or can we predict anything?  Here a couple things I foresee happening:

• Office vacancy downtown will continue to increase and older buildings are going to struggle to attract tenants.
• Retail is going to remain strong as more great places open.  Our downtown is truly becoming a destination.
• Increased interest in our downtown is going to continue to spur new activity, and I'm hopeful there will be more residential to our downtown and close in neighborhoods.

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