Apr

11

Industrial - Kootenai County Commercial Real Estate (5 of 5)

Filed Under Kootenai County, Local Market 

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
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Manufacturing Employment
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