By Brandon Rawlins, Principal Broker, and Bronson Rawlins, Retail Lead and Associate, JLL
Like much of the country, the Idaho retail market is seeing a strong rebound in various retail sectors that appeal to the return of social gatherings and a hybrid approach to work life. Moreover, experiential retail is making a strong comeback as consumers crave fun and a return to normalcy. According to JLL’s recent Retail Outlook report, retail fundamentals continue to improve across most of the country, but particularly in the Sunbelt states. Shoppers are heading back to stores, moviegoers are going back to the theaters, and new demand for fun and immersive experiences is on the rise.
The Boise area is no exception, with the announcement of several new major players, including Top Golf, Scheels and several mixed-use concepts that appeal to the new hybrid work experience that combines food, shopping and residential. Eatertainment concepts — entertainment with an emphasis on food and beverage — saw a national traffic surge of 22 percent from April 2019 levels and more than 36 percent year over year. Interestingly, retail activity is not just taking place in certain submarkets or neighborhoods; there is strong activity throughout the entire state.
The impact of these developments will bring new tenants and social activity to their respective areas. Overall, the vacancy rate across the state is 3.6 percent and the asking rate is $19.60. Demand for high-quality retail assets has also returned, with grocery-anchored centers accounting for more than one-third of transaction volumes in the first quarter and roughly 72 percent of transactions identified as core or core-plus. Malls saw tremendous improvement in demand during the first quarter. Net absorption, which had been negative for seven of the past eight quarters, surged to 2.5 million square feet. Locally, the Karcher Mall redevelopment in Nampa is a major project underway in the area. The plan submitted to the city features a mix of existing and new tenants, including the Joann fabric chain, Boot Barn, DD’s Discounts, Big 5 Sporting Goods, Shoe Dept. Encore, Discount Furniture and Mattress and Ross Dress For Less. As people head back to stores, the share of ecommerce sales has dropped almost 300 basis points since the quarantine period in second-quarter 2020.