Despite significant economic uncertainty amidst a global pandemic, 2021 proved to be a robust year for commercial real estate activity in East Idaho. Given the volatility of the stock market and the perception of inflated values, investors shifted focus to income-producing real estate in record numbers. A significant migration of investors and employees into Idaho from outlying western states has helped fuel the boom.
IDAHO FALLS
Industrial, retail and multifamily projects leased up and traded at healthy cap rates.
The one local exception, however, was office leasing. This is to be expected during a global pandemic, but local developers were already constructing new office projects based upon the previous year’s sub-3% Class A vacancy rate. In any other year, they would have been rewarded with quick absorption and record-high rents, but not in 2021. As the vaccine continues to roll out and things return to normalcy, however, we can expect projects like The Knolls and 1135 Pier View Drive at Snake River Landing to see strong leasing.
Local retail activity was quite strong in 2021. RC Willey purchased a 21-acre site to construct a 115,000 square foot home furnishing store at I-15 Exit 116 and Big Deal Outlets opened a 64,600 square foot store in the former Smith’s location on Woodruff Avenue. Grocery Outlet will soon be opening a store on Hitt Road at the former AC Moore Crafts building at Grand Teton Plaza. On the small shop front, restaurants and personal services continued to grow their footprint at locations such as Hillcrest Plaza and Sandcreek Commons in Ammon.
Phase-two construction on Hillcrest Plaza will commence this spring. The project is 100% pre-leased with tenant announcements coming soon. Demand for quality industrial products continued unabated in 2021, despite significant new construction to the market. With NuScale’s ‘Small Modular Reactor’ project making significant progress, we expect this trend will continue as Idaho National Laboratory subcontractors and vendors occupy available buildings. Look for major announcements this spring regarding two very large warehousing and distribution facilities at the north and south end of Idaho Falls.
AROUND THE REGION
The new Siphon Road I-15 interchange is complete and multiple planned developments surrounding the interchange are still in the works. Pocatello’s downtown renaissance continues into 2021, with multiple new businesses occupying and purchasing historic buildings. Meanwhile, the Bannock County residential real estate market has continued to thrive during the pandemic.
Rexburg’s long-dark former Walmart property on N. 2nd East is fully-occupied as of May 1st—with CAL Ranch and Harbor Freight Tools occupying the 92,000 square foot building. Just a few yards to the north, the former Staples building at 618 N. 2nd East was purchased by Standard Plumbing Supply. Local businesses Monkey Bars and Gorgeous Garages were sold and both continue their rapid growth trajectories into 2021.
Click here to read more of the March issue of Idaho Falls Magazine.