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The Spokesman Review and Coeur d’Alene press both featured articles on the new Silver Rapids Waterpark at Silver Mountain resort in Kellogg, ID.

A few quick highlights:

• Set to open May 20, 2008
• 42,000 sq. ft. indoor water park
• Open 365 days a year
• Bar and two hot tubs on second floor mezzanine for adults

To read more take a look at the following articles:
Developer unveils new way to lure condo buyers - Spokesman Review
Water park set for soft opening May 30 - CDA Press

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Apr

23

Formal announcements of the long rumored Wal-Marts were published in today’s Coeur d’Alene press.

Hayden store to begin construction

Store to face Honeysuckle, sport Northwest look

HAYDEN — Construction on a new Wal-Mart Supercenter at the southwest corner of Honeysuckle and U.S. 95 in Hayden is expected to start this summer, city officials said.
The company has purchased the property, and the city has commented on the site and building plans that were resubmitted about two months ago, city administrator Jay Townsend said.

Wally’s world

Developer announces second store near Cabela’s

POST FALLS — Wal-Mart has found a second home in Post Falls.
Jeff Vitek of Foursquare Properties, the developer of the fledgling Pointe at Post Falls project anchored by Cabela’s, said Wal-Mart has finalized its deal on property in the development near the state line.
“We’re very pleased to announce a new Super Wal-Mart,” Vitek said on Tuesday, adding that construction could start this year on a 200,000-square-foot building on about 17 acres at the intersection of Baugh Way and Pointe Parkway in the northwest part of the project.

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Apr

16

The new version of Google earth allows you to view Spokane in street view. It also gives you the ability to see some downtown building in 3D that have been modeled and submitted to Google. Take a look at this screen shot for an example.

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Below are a few of the new features from the official Google blog:

Here’s a sample of what you’ll find in this release:

• New navigation - We’ve improved the zoom control so you can swoop down from outer space to street level in a single seamless motion. And with the addition of the “look” joystick, you can look up at buildings or across a mountain range.

• More, faster 3D buildings - It’s more fun to navigate through a lot of new 3D content. Besides adding thousands of buildings contributed by people around the world, we’ve added dozens of photo-textured cities and towns in the U.S. and elsewhere.

• Street View - The popular Google Maps feature makes its Google Earth debut.

• Sunlight feature - Never seen the sunrise over the Alps? Now you can.

You can download the new version at www.earth.google.com

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Apr

11

Review

Job growth in Kootenai County manufacturing employment has driven high demand for this product type. Of the 2,215,420 square feet surveyed in Kootenai County, only 87,869 square feet is vacant (3.97%). The majority of the vacant space was found in smaller buildings with fewer than 3,000 square feet. These vacancies are due to substantial construction of small spaces over the last several years. Even with low vacancy, leasing rates have resisted upward movement and remain fairly static. Tepid rate trends have failed to keep pace with increased construction costs, which in-turn, have kept developers from building large speculative industrial space.

Over the past year, low interest rates and favorable owner-occupied financing have converted several leased industrial spaces to owner-user space. This shift could make room for additional lease space in the near future.

Industrial land rates in Hayden have edged higher than Post Falls. In Riverbend Commerce Park, offering rates are $4.00 to $4.50/sq. ft. Light industrial lots in EXPO at Post Falls range between $5.00 and $8.00/sq. ft for half to one-acre lots. Industrial land prices are slightly higher in parts of Kootenai County than Spokane County, with some asking prices above $10.00/sq. ft.

Forecast

Only a few new projects are proposed at this time. The Riverbend Commerce Park is currently finishing up two buildings with a combined total of approximately 87,000 square feet. The Park has a 43,000 square foot building slated for construction in the near future, but no formal decision has yet been made. Riverbend Commerce Park is moving forward on Phase 4 plans, with 24 lots ranging from 1.0 to 1.5 acres, of which several lots are currently pending sales.

Businesses looking for large spaces will need to consider build-to-suit options due to the lack of supply. The aforementioned static rental rates should begin trending upward to keep up with construction costs. The manufacturing employment underpinnings of the industrial market remain positive.

Furthermore, low vacancy rates and strong demand will create a healthy industrial market in 2008.

Industrial Vacancies

Manufacturing Employment

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Apr

10

County top bidder on 300 acres at raceway auction - Spokesman Review

Article on Wallace, Idaho - New York Times

Landing marina nears completion - Spokesman Review

County halts Bayview restaurant remodel - Spokesman Review

Hayden Canyon developers try again - CDA Press

Owners seek to save course - CDA Press

Lithia Motors builds facility for dealership in Liberty Lake - Spokane Journal of Business

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Apr

10

Review

Sales volume of multi-family product in Kootenai County was off 57% as compared to 2006 ($35 million in 2007 vs. $15 million in 2006). Values declined approximately 11% from 2006 levels as the average sale price fell from $345,000 to $306,000 in the multi-family arena. Unsold stock remains higher than previous years, especially in the condo market.

The good news is Kootenai County apartments achieved an average rent of $0.77 per net square foot in 2007. Overall, apartment vacancy decreased to 4.3% from 5.7 % the previous year. Remarkably, studio apartments (a small segment in our market) recorded no vacancies in the final 2007 apartment survey conducted. Some newer units with exceptional amenities or superior locations are achieving rent of over $1.00 per net square foot.

Affordability remains a key concern for Kootenai County. A household is considered cost-burdened if annual rental rates exceed 30% of a household’s yearly gross income. Presently, one in seven US households is severely housing cost-burdened. Kootenai County’s affordability has declined over the past decade and is now less affordable than neighboring Spokane County. The growing low-income rental population is driving an increase in demand for affordable housing.

Forecast

Values will continue to be soft, presenting opportunities for liquid buyers. Vacancy rates will decline to levels not seen in years as prospective homeowners sit on the sidelines waiting for the housing market to hit bottom. Additionally, the recent melt-down in the “sub-prime” mortgage arena has caused tightening of underwriting standards for new home loans, thereby closing the door on many first time home buyers who are currently renting. The result is lower vacancy rates and increased rents for apartment housing.

Apartment Market Survey - September 2007


Historical Apartment Vacancies

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Apr

9

Google has created a powerful tool called Google Trends that enables consumers to chronologically view search & news activity for popular terms. Below is a chart of the term “Commercial Real Estate“.

What does this tell us? If you look closely you will notice a spike in activity at the end of each calendar year and at the end of each fiscal year. These periods are historically busy months for commercial real estate brokerage, especially for 1031 exchanges. To try out different terms visit www.google.com/trends

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Apr

9

Review

New construction in the area has slowed alongside the national housing market. Lots platted in Kootenai County decreased from 2,462 in 2006 to 1,362 in 2007. The largest decreases were seen in Rathdrum and unincorporated areas throughout Kootenai County. While the number of lots platted decreased, major developers positioned for future growth. A number of significant land acquisitions were made along the Highway 41 Corridor, North Hayden area, and Cabela’s development area.

Over the past decade, single-family home construction throughout the region has been stimulated by population influx to Kootenai County from neighboring states. One of the best indicators for tracking buyer relocation trends is the origin of surrendered driver’s licenses. The Idaho Transportation Department has tracked the origin of surrendered licenses since 1997. The number of surrendered licenses from California ballooned from 834 in 2001 to 1,383 in 2006. The top two sources of immigration for Kootenai County are California and Washington respectively. This data shows an increased attraction to Idaho from across the Western region.

Forecast

Census Bureau statistics project that by 2030, Idaho population will increase to over 2 million residents. This reflects a 52% increase over 2000 population, and a 45% faster growth rate than the national average. Idaho is predicted to need an additional 390,000 new housing units to absorb the population influx. An increase in housing units goes in step with an increase in jobs, retail stores and office space. Unquestionably, Kootenai County is a highly desirable destination that will continue to be viewed as a market with great investment opportunities.

Lots Platted

2007 Building Permit Summary

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Apr

8

Review

2007 marked the completion of numerous retail centers across Kootenai County. Major project completions included the opening of Cabela’s near Stateline, Kohl’s just south of Prairie Avenue on Highway 95, and Sportsman’s Warehouse adjacent to Costco.

Retail vacancy was measured at 8.1%, with over 3.8 million square feet surveyed. The highest vacancy rate was measured in Rathdrum with 12.95% vacant. The rapid development of strip centers throughout the county has outpaced retail absorption. Small users have numerous options forcing landlords of Class B properties to attract tenants with move-in specials and aggressive tenant improvement allowances.

Taxable sales attributed to Kootenai County in 2007 rose to over $1.2 billion, an increase of 7.91% over the previous year. National retailers continue to expand to meet the needs of the growing population and economic base.

Forecast

Phase II of the highly successful Sportsman’s Warehouse strip centers is scheduled for completion in summer of 2008. Tenants in Phase I have quickly realized the benefits of Costco and Sportsman’s Warehouse serving as shadow anchors.

The Pointe at Post Falls has attracted major national retailers. The project has slated over 800,000 square feet of retail to big-box, hotel, theater, restaurants, fast food and inline space. As of the end of February 2008, there are no signed contracts, but negotiations are underway with Wal-Mart, Lowe’s and Sam’s Club. A large hospitality component is also expected in the near future.

Barnes & Noble is set to open July 2008 in the Village at Riverstone. Other planned tenants include Red Robin and Ironwood Athletic Club. In first quarter 2009, nine undisclosed national retailers are scheduled to open.

Ongoing softness in the housing market will continue to affect retail absorption. Inevitably, if consumer spending continues to slump and unemployment increases, the national retail market will further soften. Kootenai County’s retail market still remains comparatively healthy, particularly in the high-end retail sector. However, a softening would likely send vacancy rates higher and exert pressure on landlords to reduce asking rental rates.

Owners and developers of retail real estate are well aware of the challenges facing retailers. Nonetheless, local conditions still remain relatively robust compared to the national situation. Kootenai County’s close proximity to Canada could also aid the retail market as tourism spending should be bolstered by the weak United States dollar.

Kootenai County Taxable Sales

Retail Survey Breakdown

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Apr

7

Review

The office sector of our market claimed the lowest vacancy rate across all sectors surveyed. Overall vacancy is at 2.37% with over 1.5 million square feet surveyed. Office tenants have trended towards fewer turnovers and a greater amount of lease renewals. Lessees have found it clearly more cost effective to renew or expand in their current location than move to a new space. Rising tenant improvement costs have contributed to the increased level of renewals. In addition, rising land prices and construction costs are driving up asking rents on new projects.

Existing buildings have continued to increase rents to compensate for higher operating costs. However, rents at existing buildings are still significantly more economical than new office space entering the market.

One major new project to note is the recently completed 46,300 square foot Riverview Tower on Northwest Boulevard. Parkwood Business Properties is offering space in this project at an annual rate of $18/sq. ft. net. As of the end of February 2008, they have successfully leased 90% of available lease space in this property.

Forecast

Year end 2007 unemployment for Kootenai County remained remarkably low at 3.5%, significantly better than the 4.8% national year-end unemployment rate. Job growth and unemployment trends are a key indicator of future office space needs. These positive factors typically foreshadow upward movement in office leasing activity as job growth and business expansion continues.

Expect to see increased build-to-suit activity in the office market as rising land and building prices make speculative construction cost-prohibitive, and developers risk ongoing holding expenses. The “credit-crunch” will remain a pervasive problem that could limit sales of office condos and new office development. Completion of the federal courthouse should keep market conditions stable throughout the year. Completion of the federal courthouse in North Coeur d’Alene will drive development of office space for tenants in associated professions. A combination of modest growth and minimal planned office construction should keep market conditions stable throughout the year.

Kootenai County Non-Farm Payroll Jobs

Office Survey Breakdown

Riverview Tower

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