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Commercial Real Estate in Idaho Falls

What’s coming in 2020?

Published online: Feb 12, 2020 East Idaho Business Brent Wilson, Thorton Oliver Keller
Viewed 1126 time(s)



2020 will be another strong year for commercial real estate activity in Eastern Idaho, with many notable large-scale public and private projects in the pipeline. These include the multiple large projects at the new Siphon Road interchange on I-15, a new 20-acre hospital campus in Chubbuck and billions of dollars’ worth of new construction at the Idaho National Laboratory.   

Retail

Eastern Idaho’s retail market saw healthy growth in 2019 with notable deals on mid- and big-box spaces with U-Haul, Al’s Sporting Goods, IndorStor and Unitek College. Most of the big-box and mid-box space left vacant by recent bankruptcies is now leased. Small-shop leasing remains strong near the regional malls, with food service and personal services tenants spearheading the bulk of new leasing activity.  

In 2019, retail vacancy rates in the region dropped again to 6.22%, which is the result of vacant buildings being released. Active retail tenants in the region include coffee shops, urgent care operators, high-end burger chains, multiple ‘fast casual’ pizza concepts and Mexican-styled fast food concepts.

Look for multiple new tenant announcements at The Broadway in mid-March.

Hospitality

The hospitality sector continues to perform very well in Eastern Idaho, particularly during the summer months. Ball Ventures’ new Tru (by Hilton) hotel (680 Lindsay Blvd.) is now open and Ball Management’s new Holiday Inn hotel (Jackson Hole Junction) will come online in 2020. This activity brings the total number of hotel rooms located along the I-15 corridor in Idaho Falls to well over 2,100 rooms. Occupancy levels and average daily rates for local hotel operators continue to exceed expectations and multiple other low-to-mid-tier operators are currently evaluating the market.

Office

For office leasing, 2019 was a banner year in Idaho Falls with the overall vacancy rate declining from 14.4% in Q1 to sub-9% by year’s end.  The North and West submarkets are still seeing a high amount of vacancy (13-20%) while the South and River submarkets (Taylor Crossing, Snake River Landing, and the area surrounding the two hospitals) have been red hot, with roughly one-third the vacancy levels of neighboring submarkets.  

Oppenheimer Development Corporation’s “The Broadway” project in downtown Idaho Falls is nearly 100%-occupied with some of the strongest post-recession rents the market has ever seen.

Industrial

Although the market-wide industrial vacancy rate increased in 2019 from 3.03% to 3.9%, net absorption was quite strong. The resulting increase in vacancy was due to new construction.  However, the industrial vacancy rate in the south and west sub-markets stayed at/below 1% and it is interesting to note there are zero listings in the market under 1,000 s.f. as of the date of this report.

Given that much of eastern Idaho’s remaining available industrial inventory is functionally obsolete, new construction is on the rise. Eastern Idaho’s industrial lease rates are now some of the highest in the state, with “Class A” asking rents approaching $0.90 per square foot in some cases.  

Want to read more from February's issue? Click here!

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