1st Quarter - May 4th, 2009

  Overview

The first quarter of 2009 continued to show signs of tough economic times for Treasure Valley industrial properties. Vacancy continued to rise, rents continued to drop, and development came to a halt.

Leasing activity was slow, and there were very few properties leased with space over 15,000 square feet. Sublease space continued to rise while companies tried to survive through the difficult economy. Industrial land values continued to decline. There was very little sales activity in the market because value was hard to determine and financing is difficult.

  Outlook

Space is being leased. Leasing activity is slowly picking up, but most leases have been for smaller units (generally under 5,000 SF). Lease terms tend to be shorter, landlords don't want to be locked in at lower rates and tenants are concerned about future revenue.

More sales activity will be coming as distressed assets come on the market and lease rates stabilize. Industrial land prices are declining and will continue to fall to the point that land can be purchased and developed. The only industrial development will be build-to-suit projects for companies with specific needs that can't be satisfied with existing sites. More leasing incentives are being offered to attract tenants (free rent, tenant improvements, gross leases, broker incentives).

  Industrial Services Team

Steve Foster Email Me	Jake Tucker Email Me	Rick Scruton Email Me	Devin Ogden Email Me