There is no getting around the fact that the Treasure Valley is the economic anchor of the state. Its position in Idaho’s economy drives the local demand for office space. People want to do business in and around Boise and are willing to pay for the space to do that.
While many left their offices to work at home during the pandemic, the effect this has had on the amount of vacant office space has been muted compared with the rest of the country. The pandemic made a modest impact on office vacancy rates, but nowhere near as much as in other areas. Many Treasure Valley workers are still going to the office if Treasure Valley vacancy trends are any indication.
According to research studies of office space by Statista and the National Association of Realtors, the average office vacancy rate for the entire country before the pandemic was around 10%. Vacancy peaked at 15% during the second quarter of 2020, an increase of 5%. Since then, vacancy has stayed high in most of the nation. Before the pandemic, overall office vacancies rates had been in a gradual downward trend since the recession of 2008-2010.
In comparison, as reported almost a year ago in the Idaho Business Review, office space in Boise had a vacancy rate of 5.9% at the beginning of March 2020. Numbers like this reflect the high demand for space in the Treasure Valley. Different submarkets in the Treasure Valley have different vacancy rates and vacancy statistics will vary from firm to firm. The point here is that before the pandemic, most reported vacancy rates were well under 10%.
The surprise is that vacancy rates haven’t changed that much despite the arrival of COVID-19. Though most Ada and Canyon county submarkets have seen modest vacancy rate increases, almost all are still well under 10%.
According to research provided by Colliers, one of the largest commercial real estate brokerages in Idaho, the downtown office vacancy rate going into 2021 was 6.7%, an increase of 2.4% from the previous quarter. Another prominent CRE firm, TOK Commercial, reported a similar increase in downtown vacancy from the previous quarter of approximately 2%. This increase is a lot lower than the national increase in office vacancy of 5%. When compared with a current 15.2% office vacancy rate for Manhattan and 14% for the Loop and Magic Mile in Chicago, Boise is doing well.
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