Boise Investment Report Q1 2019
Overall actual cap rates, excluding multi-family properties & national credit NNN deals, have averaged around 7% for investment properties in the Boise MSA. First quarter sales consisted primarily of office space, largely due to the Owyhee Building sale in Downtown Boise. Many of the new properties added to market inventory consists of multi-family projects, which has helped fill demand from the substantial population growth in the Treasure Valley. The Multi-Family sector has achieved record low vacancy rates, thus drawing tremendous demand from local and foreign investors. This demand and market competition has allowed sellers to close deals at, and in some cases, over asking prices, with most of these properties trading at or below a five percent cap rate. Retail properties retain the highest per square foot asking prices, given the sector’s higher average net rents, longer lease terms and fewer landlord responsibilities. Most of Q1 2019 retail investment transactions were single-tenant investments, representing the lower total square feet sold. As Boise continues to grow and gain more national exposure, there are an increasing number of institutional investors trying to gain economies of scale in the Boise MSA. This has compressed cap rates on the majority of asset classes. This compression and increased competition makes it harder for the smaller investor to win deals that still meet their investment thresholds.