BoiseDev told you yesterday about the investor demand for local real estate. But investors are interested in buying more than single-family homes.
Locally based brokers with Colliers International said demand from out-of-state buyers to purchase apartment buildings and office buildings is at record levels. Clay Anderson, an investment broker who typically deals in multi-family properties, said he’s seen a big influx of investors from the coast looking to buy up rental properties because of the quality of life and “stable political environment.”
Not 2008 all over again
He said there’s always been strong demand in the market, but since the pandemic hit it’s reached levels of demand he has never seen. And oftentimes properties aren’t even listed on the market before they’re sold.
“We’ve always had a bit of an imbalance of more buyers than sellers and so especially in apartments you’d say for every one deal you can find a seller you’re going to have 30 to 50 buyers,” he said. “Now it almost feels like every one deal you can find to sell you’ve got a couple of hundred potential buyers.”
But, this doesn’t mean this steep increase in prices is leading to a bubble, like the years before the Great Recession caused by the implosion of the subprime mortgage market. Anderson said he saw more speculation and overvaluing of the market back in 2006 than he sees now, where people are better able to meet their borrowing obligations.
“If I looked at trends of Boise pre-recession, it felt like there was a lot more speculation back then,” he said. “People were stretching further than normal in (borrowing for) homes and other categories of development and you had people talking about moving their companies here, but they couldn’t figure out how to functionally do it.”
“It seems like now you have companies moving here and we also have the post-COVID world of the remote worker,” Anderson said.
COVID-19 who? Office buildings a safe bet
National headlines from San Francisco, Washington D.C. and New York City warn of the decline of downtown cores as major employers go full remote. But, in small to midsize markets like Boise buying an office building is still a safe bet to make money.
Lance Millington, who works in office brokerage for Colliers, said Boise has always been attractive for investors from out of state looking for good deals, but now demand has increased along with interest in people relocating here and prices have slowly ticked up.
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