MARKETBEAT Retail Q3 2020 BOISE COVID COMMERCIAL REAL ESTATE 2020 continues to be an unforgettable year for everyone. Idaho has been able to come back after the initial pandemic shut down at near equal strength as before. Idaho continues to be growing at a record rate with the Treasure Valley leading the in-migration race. The increase in population is encouraging to the existing retailers that are expanding and driving the new to Idaho retailers. As the population grows the need for services only increases regardless of the pandemic. Even as COVID 19 cases are predicted to uptick in the winter months retail appears to be staying strong. THE RESILIENT TENANT Even as the pandemic has continued, the Idaho market has not seen many closures. The vacancy rates seem to reflect more of the big box users that were already on the way out before the pandemic. There has not been an influx in smaller spaces in the 1,200 to 5,000 sf range coming available which seems to be creating even more demand as product remains slim. We are seeing some mid box users such as Big 5 having record sales and renewing their leases. With the population continuing to grow the housing and multi family sectors are exploding directly reflected in the strength of home improvement retailers. We are seeing home improvement, furniture, flooring, and landscape doing well, and in some cases expanding. Restaurants that may have experienced hard times in the beginning of the pandemic have reinvented themselves to better serve people in the current climate. Just out of the initial COVID shut down O’ Crab Seafood & Bar signed a lease in over 6,000 square feet. We are seeing several QSR tenants expanding into our market with the same velocity as before the pandemic. The main change surrounding new QSR locations is the need for a drive thru. The desire for drive throughs has been a long standing one but with the pandemic it has become a must. The demand for these types of spaces will drive up the rents in the coming months. THE FUTURE OF COMMERCIAL REAL ESTATE IN IDAHO The Idaho retail team will continue our long-standing optimism for the future of commercial real estate in Idaho. We particularly see retail showing its flexibility to cope with the times and find success. We stand by our past predictions that the population growth will only open up our market to more retailers. As we head into the holiday season there will be the standard increase in online ordering. The recommendation is to not be discouraged by the decreases in brick and mortar shopping. As in years past, there will be a bounce back after the holidays as consumers return and rebuy in stores. $65,400 Boise HH Income 2.8% Population Growth 5.2% Unemplyment Rate Source: BLS (Economic Indicators are representative of specific county or MSA.) -8.0% Consumer Spending Growth 18,128 GDP Growth -2.3% Retail Sales Growth Source: BEA, Census Bureau U.S.ECONOMIC INDICATORS Q3 2020 YoY Chg YoY Chg RENT / VACANCY RATE AVAILABILITY BY PRODUCT TYPE 38% 27% 26% 9% Neighborhood & Community Strip Power & Regional Freestanding Neighborhood & Community Strip Power & Regional Freestanding 5% 6% 7% 8% $10 $12 $14 $16 2014 2015 2016 2017 2018 2019 Q3 2020 Asking Rent, $ PSF Overall Vacancy Rate 12-Mo. Forecast 12-Mo. Forecast