As the impacts of the COVID-19 global pandemic take shape, Idaho has rebounded to be one of the least effected markets in America. Unemployment fell to 4.2% in August, placing Idaho #3 in the nation for the lowest unemployment rate. In May, Idaho set its’ all-time unemployment record with a high-water mark at 11.5%. In Q3, Boise tied Salt Lake for lowest unemployment rate and top population growth year over year. In-migration continues to be a driving force for our low unemployment. Consistent publications rank Idaho a top 10 place in the country to live, retire, or relocate citing our quality of life, affordability, economy, and other factors as reasons to call Idaho home.
SUPPLY AND DEMAND:
The Idaho industrial market continues to show strength into the third quarter. Vacancy remains steady at 3.4% up just 7 basis points (bps) from Q2, and up from pre-COVID Q1’s 3.0%. Q3 vacancy remains approximately 2.0% below the national average of 5.3% and is forecast to be even wider in Q4, as national vacancy is expected to rise to 5.6%-5.8%. The lack of supply within the market is a result of growing demand from our robust owner/user market and furthered by the addition of new companies and corporations relocating or adding additional locations in Idaho. Amazon is set to occupy their 2.6 million square foot (msf) build-to-suit in Nampa, ID in Q4 and is an example of Idaho’s growth in population and large corporations arriving to service our communities. The Amazon project brought in development and construction teams (Pananttoni Development and Clayco, Inc) rarely seen in our market. Also, Amazon is rumored to have a last-mile facility coming to the Treasure Valley. Additional supply for the healthy demand within the market is limited as the majority of projects in 2020 are build-to-suit. Although speculative development is much needed to relieve the constraint on the market, very little new development is being built on a speculative (spec) basis. To date, only 275,586 sf of spec has completed, and just 102,000 sf is slated for Q4. Year to date net absorption is approaching 800,000 sf and will more than triple with the addition of the new Amazon distribution center in Q4.