Market Data

Rocky Mountain Roundup

Growth opportunities prompt investors to stake their claims.

Change and growth define the U.S. Rocky Mountain region. Four of the country's top five fastest-growing states are part of the region: Nevada, Colorado, Utah, and Idaho, according to the U.S. Census Bureau.

In Kootenai County, Idaho, property values shot up 40 percent and totaled $14.2 billion, up $4 billion from last year, according to Multifamily Executive Online. New development added an additional $590 million to the county's tax base, MFE reports. Included in these new developments are 249 condominiums, 20 town homes, and 81 apartments in downtown Boise alone, according to Idaho Business Review.

In Las Vegas, office vacancy rates remain low at 11.6 percent downtown and 10.5 percent in the suburbs. Area office developers are beginning to consider green alternatives. Developer Glen, Smith & Glen is obtaining Leadership in Energy and Environmental Design certification for a 350,000-sf portion of its $75 million the Park at Spanish Ridge office property.

Salt Lake City industrial properties sold at an average price of $44.42 psf during 2Q06, a six-year high. Investment sales are up 300 percent from last year with more than 3.3 million sf sold so far. The city also experienced high construction rates with 923,000 sf completed through 2Q06, according to CB Richard Ellis.

In the Reno-Sparks, Nev., metropolitan statistical area, rising wages and population influx are causing multifamily rental rate increases, according to CB Richard Ellis. The apartment market has grown tight due to very little new construction and the Reno city council's tight control over condo conversion licenses.

Denver retail construction has reached record-setting proportions, according to CB Richard Ellis. Even though absorption was negative in 2Q06, 6.5 million sf were under construction. Asking lease rates rose to $15.90 psf and growth is expected throughout the year as consumer spending shows few signs of slowing down.

The Rocky Mountain region should continue to grow through the coming months as investors are priced out of more expensive regions.

Multifamily Rises Above

The $225 million, 27-story, 266-unit Pinnacle at City Park South is one of Denver's first high-rise developments in nearly 20 years. Units range in price from $275,000 to $2.4 million and feature views of Denver's skyline and City Park, modeled after New York's Central Park. Phase one completion is slated for Sept. 2008.
image credit: Opus

Mobile Office Market

  • Boise's office market continues to grow stronger as the city's economy attracts new businesses. At the end of 2Q06, the central business district was 9.5 percent vacant, placing it among the top 10 lowest U.S. vacancy rates, according to Grubb & Ellis.
  • Idaho was ranked third in the country for job growth with employment increasing 5.1 percent in 1Q06 alone and adding 35,000 jobs last year, according to a Federal Deposit Insurance Corp. report.
  • Despite Boise's growing economy, 2Q06 class A and B office rents were some of the lowest in the nation, $17.73 psf and $10.78 psf respectively, according to Grubb & Ellis.
  • Wages in the Boise metropolitan statistical area lag behind the rest of the nation by 15 percent reports George Iliff, managing principal at Colliers International in Boise, in Idaho Business Review.
  • Sky Ranch Business Center in Caldwell, Idaho, approximately 30 miles west of Boise, will add a much-needed boost of commerce to the area. Sky Ranch is the area's largest planned business center and includes 75 acres of mixed-use business space and 120 acres of light industrial space, according to the Idaho Statesman.

Guiding Growth

As Montana housing prices rise, land stewardship developments such as Clark Fork Commons supply affordable housing alternatives.
photo credit: Portico Real Estate

Many Missoula, Mont., households are spending more than 40 percent of their income on housing due to increasing rents, according to the North Missoula Community Development Corp. As housing prices and rents continue to rise, so does the community's need for affordable housing. City officials and housing advocates have lauded one affordable housing development sponsored by the NMCDC and a combination of federal funds, according to Construction on the 25-unit Clark Fork Commons town homes began in 2003 and is nearly complete. The units sell for $113,000 to individuals making 80 percent or less of median income, reports

Retail Thrives in Asia

Representing 26 percent of global gross domestic product and 32 percent of global retail sales, Asia's retail sector continues to grow. Annual sales rose 7 percent last year and are projected to continue to climb. India and Vietnam top the list of emerging Asian retail markets, with Thailand, South Korea, and Malaysia following close behind. Market highlights include:

  • India's $350 billion retail market is forecast to rise by 8 percent this year and the government is loosening restrictions on international retailers entering the market. Gap, Zara, Timex, and United Colors of Benetton will open stores, but entry barriers still exist for companies, such as Wal-Mart, which sell several different brands.
  • China's retail market grew by more than 12 percent last year and more than 40 international retailers are competing in the market. Several brands have been very successful. A British do-it-yourself retailer increased sales by 50 percent, or close to $550 million, last year. Still, experts predict that China's retail market is reaching the saturation point.
  • Vietnam's economy is growing at a rapid pace and consumer spending increased 16 percent last year. Home to a growing population of 84 million people, Vietnam's residents are willing to spend. Last year modern retail sales rose by 20 percent. Though there are some entry barriers, U.S. brands such as Costco and Levi Strauss & Co. have entered the market.

Source: A.T. Kearney's Emerging Market Priorities for Global Retailers

Local Luxuries

Are Las Vegas locals ready for a place of their own? Developers are betting yes with two new mixed-use properties aimed at local residents. The $850 million, 700,000-sf Village at Queensridge includes upscale retail, restaurant, entertainment, and office space located 11 miles northwest of the Las Vegas Strip outside a residential development.

The 1.5 million-sf Town Square includes 150 retail stores, more than 12 restaurants, 200,000 sf of class A office space, an outdoor concert venue, movie theaters, and a children's entertainment complex. The $750 million development sits on the Strip's far south side.

The timing is right for these types of developments as Las Vegas continues to grow in population and wealth. Nearly 200,000 residents of Clark County, Nev., earn more than $100,000 each year, according to the U.S. Census Bureau.

Town Square is slated to open in fall 2007 and Village at Queensridge will complete in 2008.
Source: CoStar

Image: The Village at Queensbridge
Image credit: Design Development Group

Downtown Renovation

Throughout the next five years $1.5 billion will be invested in Salt Lake City's central business district according to a report in the Deseret Morning News. The Salt Lake Chamber is planning "Downtown Rising" to take the city's downtown toward a more unified, 24-hour atmosphere. With Utah's healthy growth rate - more than 47,000 jobs were added to the state's economy throughout the year ending April 2006, placing Utah in the top five states nationwide for job growth - there may be as many as 10,000 people living there in the next 10 years, according to Lane Beattie, chamber president.

All Eyes on Industrial

  • The industrial market has been in an upswing since the beginning of 2005.
  • The vacancy rate dropped to 10.87 percent during 2Q06, the lowest since 4Q04.

  • Nearly 100,000 sf were absorbed during the first half of the year - not quite the boost needed to jump-start a quick recovery.
  • Lease rates rose to $7.28 psf during 2Q06. They should level off as owners lower prices to attract tenants.
  • The largest amount of vacant space - 1.3 millions sf - is in the southeast submarket.

Source: Sierra Commercial Real Estate

Carolyn Bilsky

Area report is written by Carolyn Bilsky, associate editor of Commercial Investment Real Estate. Contact her at (312) 321-4507 or


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