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Q1 2021 OFFICE
MARKET REPORT
B O I S E M E R I D I A N E A G L E K U N A N A M PA C A L D W E L L
YOUR GUIDE TO THE BOISE VALLEY’S OFFICE MARKET
Information deemed reliable, but not guaranteed. © 2021 TOK Commercial. All rights reserved.
CALDWELL
NORTH
NAMPA
EAGLE
MERIDIAN
SOUTH MERIDIAN
WEST
SOUTHWEST
AIRPORT
CENTRAL
DOWNTOWN
SOUTHEAST
MIDDLETON STAR
KUNA
SUBMARKET MAP
250 S . 5th St reet , 2nd Fl r Bo ise , Idaho | 208 .378 .4600 | tok commerc ia l .com
To subscribe to our Market Reports, email us: [email protected]: Kristi Larson, Taylor Hill & Savannah Willits
Q1 2021 OFFICE
MARKET REPORT
OFFICE MARKET
MARKET SNAPSHOT
563,000 SQ. FEETNET ABSORPTION
7.3%TOTAL VACANCY
$18.00AVERAGE FLSV LEASE RATE (ANNUALLY)
ANNUAL QUARTERLY
ANNUAL QUARTERLY
ANNUAL QUARTERLY
tokcommercial.com
MARKET SUMMARYThe way in which some companies use office space underwent a seismic shift in 2020 due to COVID-19. The year began with total vacancy at just 5.8 percent and some businesses, especially in or near Downtown, looking for
parking spaces for their increasing headcount. However, with the shift of many employees working from home, the Office market saw a substantial uptick in sublease space. Prior to the pandemic, there had been 150,000
square feet of sublease space available. By the end of 2020, that amount had grown to nearly 360,000 square feet.
Couple this newly available sublease space with the 1,026,000 square feet of new construction (a record year), and office tenants suddenly had significantly more choices in where to lease space. Of the new construction,
nearly half of it was speculative, though many of the newly completed Class A projects had seen strong pre-leasing. Total vacancy ended the year at 7.3 percent, still at a very healthy level. Projected office supply is 14
months, within the market range of 6 to 18 months. Meridian and South Meridian saw the largest amount of new product delivered, yet they also remain within the healthy supply range (11 and 17 months, respectively).
Net absorption for 2020 was 563,000 square feet, with nearly 80 percent of absorption occurring in the fourth quarter alone. A sizable portion of the Q4 activity occurred in newly completed buildings in Meridian and
Downtown Boise. This new product also had an impact on Class A lease rates for the market, which rose over $2.00 per square foot since the end of 2019 to $22.00. Overall asking rates also increased from $17.40 to $18.00
per foot (annual, Full Service).
Similar to what has been seen for years in the residential market, the Boise MSA remains high on the list for many companies looking to relocate from coastal markets. Calls from out-of-state companies looking to relocate back
office/administrative support continue to be commonplace. With the new construction that has been delivered, and the available sublease space, the Boise market finally has options for such relocations. In 2020, 29 percent
of the space leased in the Boise MSA was from businesses new to the area. Another 30 percent of deals were local companies that were expanding with additional locations or growing into larger spaces.
Lease rates will likely remain flat for the first part of 2021 as the new product is being absorbed. Class B office rates could get more competitive as they compete with sublease availabilities, however new construction rates
will remain near record highs as the cost of tenant improvements has not seen any decline. Tenants may seek a slightly lower rate, or higher improvement allowance, in exchange for longer lease terms.
New construction will remain strong in 2021, though it will likely slow from the record high volume of 2020. More buildings will be completed at the Ten Mile Crossing project in Meridian, as well as new projects in Eagle
such as the PetIQ headquarters and Intuit’s second building at Lakemoor.
OFFICE CONDITIONS
OFFICE OUTLOOK
OVER ONE MILLION SQUARE FEET OF NEW CONSTRUCTION WAS DELIVERED IN 2020.
NEARLY 30 PERCENT OF TRANSACTIONS IN THE PAST YEAR WERE WITH NEW TO THE MARKET TENANTS.
TAKEAWAYS:
5 t o k c o m m e r c i a l . c o m
$14.00
$16.00
$18.00
$20.00
$22.00
$24.00
2013 2014 2015 2016 2017 2018 2019 2020
Class A Asking Rates Class A Actual Rates
Overall Asking Rates Overall Actual Rates
OFFICE MARKET STATS
‐
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
SQU
ARE
FEE
T
TOTAL VACANCY increased from 5.8 PERCENT in 2019 to 7.3 PERCENT at the end of 2020.Vacancy in DOWNTOWN BOISE (11.5%) reached an HISTORICAL HIGH.
*Annual Full Service Lease Rates
Overall ASKING RATES are the HIGHEST on record.MERIDIAN CLASS A asking rates rose to $24.50/SF, their highest level.
DOWNTOWN had the the LOWEST net absorption in 2020, with NEGATIVE 212,100 SF. PROJECTED SUPPLY increased to 14 MONTHS in 2020, primarily due to NEW CONSTRUCTION.
NET ABSORPTION
LEASE RATE TRENDS VACANCY TRENDS
VAC
AN
CY
RATE
0%
5%
10%
15%
20%
25%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Total Vacancy: Includes All Buildings
Multitenant Vacancy: Excludes Single‐Tenant Buildings
LEA
SE R
ATE
S
In 2020, 35% of deals were with HEALTH SERVICES | MEDICAL tenants, up from 17% in 2019. FINANCIAL and INSURANCE tenants leased nearly 55,000 SF of space.
TRANSACTION BY BUSINESS TYPE
35%
24%
11%
8%
8%
6%5% 3%
Health Services, Medical Financial, Insurance, Real Estate, Legal Services
Technology Architecture/Engineering
Government Business Services
Other Education
*Based on transactions in 2020
6 t o k c o m m e r c i a l . c o m
OFFICE MARKET ACTIVITY
SOUTH MERIDIAN78,000 SFLEASED TO PILLPACK
SOUTHEAST BOISE29,200 SFLEASED TO MARVELL SEMICONDUCTOR, INC.
SOUTHEAST BOISE13,400 SFOCCUPIED BY DELTA DENTAL
CENTRAL BOISE20,000 SFSOLD TO ADA COUNTY
DOWNTOWN14,900 SFLEASED TO BROWN & CALDWELL
MERIDIAN60,500 SFLEASED TO PERSPECTA
SOUTH MERIDIAN85,100 SFLEASED TO ICCU & COMPUNET INC.
MERIDIAN89,400 SFLEASED TO AMERIBEN & JUB ENGINEERS
CENTRAL BOISE19,200 SFOCCUPIED BY CHILDREN’S THERAPY PLACE
BLACKSTONE BUILDING EAGLE VIEW LANDING - ICCU BUILDING TEN MILE CROSSING - AMERIBEN II
CLEARWATER BUILDING PIONEER CROSSING TEN MILE CROSSING - LASALLE BUILDING
555 PARKCENTER BLVD 250 BEECHWOOD 101 S. ALLUMBAUGH WAY
7 t o k c o m m e r c i a l . c o m
BOB MITCHELL, [email protected]
DAN MINNAERT, SIOR, [email protected]
CHRIS PEARSON, [email protected]
MIKE [email protected]
PETER OLIVER, SIOR, [email protected]
MIKE GREENE, SIOR, [email protected]
NICK [email protected]
AL MARINO, [email protected]
PATRICK SHALZ, [email protected]
KARENA [email protected]
LAURIE REYNOLDSON CCIM, [email protected]
ZACK [email protected]
DEVIN PIERCE, [email protected]
GAVIN [email protected]
BRIANNA MILLER, [email protected]
MARK SCHLAG, CCIM, [email protected]
HOLLY CHETWOOD, [email protected]
LENNY NELSON [email protected]
MARKET INSIGHT+122 MILLION SQUARE FEET
TRACKED REAL TIME ACROSS IDAHO MARKET
RESULTS18,000 SQUARE FEET
LEASED OR SOLD PER BUSINESS DAY (2020)
REACHAS THE LARGEST CRE FIRM IN IDAHO, WE CAN COVER
REQUIREMENTS ACROSS THE STATE
OUR EXPERTISE. YOUR ADVANTAGE.JOHN STEVENS, CCIMSALES [email protected]
MICHAEL BALLANTYNE SIOR, CCIM MANAGING [email protected]
BOISE OFFICE
2 5 0 S . 5 t h S t r e e t , 2 n d F l r B o i s e , I d a h o | 2 0 8 . 3 7 8 . 4 6 0 0 | t o k c o m m e r c i a l . c o m
