WESTERN SNAPSHOT, AUGUST 2009

Boise, Idaho, Apartments

1. MARKET MOVES

Located in the Meridian submarket of Boise, the 171-unit Selway Apartments were completed this spring by Spokane, Washington-based Rudeen Development. The estimated $12 million development embodies the Urban Land Institute’s June 2007 advisory report recommendation to Ada County to prevent urban sprawl and focus on smart-growth projects of higher quality. Many of the developments in the Treasure Valley in the past 3 to 5 years have been low-density four-plex communities with little or no amenities. Selway Apartments is a luxury community with enviable amenities in a desirable location.

2. MARKET MEASURE

The unemployment rate is climbing in Boise, and it will be interesting to see what the correlation will be between this statistic and the market’s vacancy rate. Unemployment in the Boise metro area rose to 10.1 percent in June. In neighboring Canyon County, the unemployment rate rose to 12.2 percent in June, the highest it has been since 1983. If this trend continues, further impact on Boise’s multifamily vacancy may be seen.

3. THE MARK OF A MARKET

Although Boise is struggling like many northwest markets, there is an emphasis by the state and local governments to bring high-tech companies to the area. In the long term, the jobs will attract more people to the area, which should have a favorable influence on the multifamily market in Boise. According to a recent Moody’s economic report, a slowdown in technology spending in 2008 through 2009 is prompting companies that need an upgrade to do so in 2010. Idaho was cited as one of the states that has a high concentration of tech-related industries and is well-positioned, according to Moody’s, to take advantage of this trend.

— John Nicolas is an associate in the Boise office of Marcus & Millichap Real Estate Investment Services.

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