Apr

8

Retail - Kootenai County Commercial Real Estate (2 of 5)

Filed Under Kootenai County, Local Market 

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
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Retail Survey Breakdown
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