Boise’s continued growth is creating a commercial real estate level of activity that is a beacon of hope for the future of our industry and for Idaho. Despite some examples of struggling retailers, there are countless more retailers who are capitalizing on the growth and predicted explosion of the population of Idaho.

Despite the aggressive decline in absorption, the increase in vacancy rates, and the slight decline in rents, 2021 will see marked improvement in the retail sector, especially in the second half of the year.

Investment activity came roaring back to life in the second half after a brief pause earlier in the year as uncertainty around the COVID-19 pandemic decreased.

The U.S. industrial market finished the year remarkably strong with 89.8 million square feet (msf) of net absorption, the strongest single quarter ever recorded. This brought the year-to-date (YTD) total to 268.4 msf, surpassing the 240.9 msf reported at year-end 2019 by 11.4%.

Although the recession that began in March 2020, triggered by COVID-19, was short and steep, its impact was still being felt in the U.S. office market through the fourth quarter. After economic activity had collapsed at a record pace in Q2, it rebounded almost as sharply in Q3. By the fourth quarter, the pace of recovery had slowed some, and by most measures, economic performance was still below pre-recession levels.

The Idaho industrial market exploded in Q4 with the completion of the Amazon Distribution Center (aka Project Bronco). Vacancy tightened to a year low 3%, down 0.30% year over year and 0.50% down from Q4. Fourth quarter vacancy increased to 2.2% below the national average of 5.2% and is forecast to grow even wider in Q4 with national vacancy expected to rise to 5.5%-5.7%.

The fourth quarter of 2020 continued to show the effects of the COVID-19 virus, but did show signs of recovery and leveling in the Treasure Valley market. Overall vacancy for the market ended the year at 8.0%, which was only a 0.45% increase from Q3 vacancy rates.

Emerging Trends in Real Estate® 2021 reflects the views of individuals who completed surveys or were interviewed as a part of the research process for this report. The views expressed herein, including all comments appearing in quotes, are obtained exclusively from these surveys and interviews and do not express the opinions of either PwC or ULI. Interviewees and survey participants represent a wide range of industry experts, including investors, fund managers, developers, property companies, lenders, brokers, advisers, and consultants. ULI and PwC researchers personally interviewed 1,350 individuals, and survey responses were received from more than 1,600 individuals.