Boise and Twin Falls are experiencing new development.
The Idaho retail market is showing signs of growth. Boise and Twin Falls are experiencing new developments breaking ground and national retailers are expanding or moving into the area. Much of this new development is coming in from California, Utah, Colorado and Arizona.
Tenants are making deals again. Anchor tenants in second-generation space are looking in that $8-per-square-foot to $11-per-square-foot range for larger spaces. Shop spaces in A+ locations are still demanding high $20 per square foot lease rates and even into the low $30 per square foot for the higher-end projects like Meridian Town Center and the Whole Foods/Walgreens developments in Boise. Local and regional retailers are making a strong push to secure prime space as they are seeing lease rates start to rise. Many tenants are more willing to lock into longer lease terms if they can keep a lower rate. Landlords are beginning to provide tenant improvement allowances so long as the lessees can prove financial stability.
Idaho is also experiencing retail market trends that are similar to the rest of the country. Larger healthcare facilities are driving the expansion of surrounding retail developments in Nampa and Twin Falls. Additionally, a few of the big box retailers are making moves to smaller footprints within the market.
The Idaho retail market can be divided into five geographic areas: Boise, Twin Falls, Pocatello, Idaho Falls and Northern Idaho. Boise, the capital city with a population of more than 600,000 and growing,is a very active market encompassing both Boise and Meridian. Several major developments are currently under construction: 8th & Main, Whole Foods/Walgreens, Meridian Town Center and the Fred Meyer project. These developments alone are adding more than 1.4 million square feet of retail space, consisting of big and mid-box retailers, as well as shop space. Lease rates on these projects vary widely, as they are all in notably different parts of the trade area.
This market is often referred to as the Treasure Valley which is comprised of Boise, Meridian, Nampa and Caldwell. Nampa and Caldwell were hit the hardest with the recession but appear to be coming back, although at a much slower pace than Boise and Meridian.
Twin Falls is also very active, serving south central Idaho and northeastern Nevada. Much of the new retail development in this region is fueled by the newly constructed 700,000-square-foot St. Lukes Regional Medical Center, which serves eight counties in southern Idaho and northern Nevada. The Rim Project, anchored by Kohl’s, and North Haven are both new projects currently under development. Total square footage is yet to be determined. Two large employers, Glanbia Foods and Chobani Yogurt, have both recently announced that they will be constructing facilities in Twin Falls that will add roughly 550 new jobs to the market.
The remaining three regions, Pocatello, Idaho Falls and Northern Idaho, are showing little activity. The good news is the market remains stable. As the economy improves nationally, these markets should see new growth in the next few years.
— Andrea Nilson, director – retail specialist, Cushman & Wakefield | Commerce