Emerging Industrial Markets: Boise
June 28, 2022
DemographicsApproximately 960,500 people live within a 100-mile radius of the Boise metro area, with a projected growth rate of 2.0% over the next five years. The important 18-to-34 age group accounts for more than 22.8% of the total population. Within 250 miles, occupiers can reach 2.5 million consumers.
Figure 1: Boise Population Analysis
Source: CBRE Location Intelligence.
Figure 2: Boise Warehouse & Storage Labor Fundamentals
Source: CBRE Labor Analytics.
Location IncentivesOver the past five years, there have been 19 economic incentive deals negotiated with specific companies totaling nearly $130 million at an average of $43,895 per new job in the Boise metropolitan area.¹
According to CBRE’s Location Incentives Group, among the top incentive programs offered in Metro Boise is the Tax Reimbursement Incentive, a performance-based credit of up to 30% on income, payroll and sales taxes for up to 15 years. To qualify, existing or new businesses must create at least 20 new full-time jobs in rural areas or 50 new jobs in urban areas with average wages at or above the county average.
The Idaho Business Advantage Program provides businesses with a wide range of incentives, including tax credits, sales tax rebates and property tax exemptions, if at least $500,000 is invested in a new facility and at least 10 jobs are created that pay a minimum of $40,000 per year plus benefits.
Figure 3: Top Incentive Programs
Source: CBRE Location Incentives Group.
1 WAVTEQ Incentives Monitor; January 2017 to December 2021.
Logistics DriversBoise is in southwestern Idaho and is served by Interstate 84 between Portland, OR and Salt Lake City, where it connects with major north/south highway Interstate 15 running from the Canadian to Mexican borders. The region is served by Boise Airport, which owns more than 5,000 acres adjacent to its runways for commercial development. The airport recently secured a new 30,000-sq.-ft. build-to-suit cargo facility for a large e-commerce company on an adjacent 3.4-acre parcel. In another new development, construction of the nearby 900,000-sq.-ft. Red River Logistics Center is also underway and is scheduled for delivery in early 2023.
Supply & DemandBoise’s industrial inventory totals just under 44 million sq. ft., mainly consisting of facilities that are 50,000 sq. ft. or smaller. Despite rising material costs, approximately 700,000 sq. ft. of new supply—84% of it preleased—was delivered in Q1 2022. Park84, a seven-building industrial complex totaling 605,000 sq. ft., is scheduled to break ground later this year in Nampa.
Strong population growth and e-commerce demand continue to fuel the need for more industrial space in the area. The Boise market had 3.5 million sq. ft. of industrial construction underway in Q1, predominantly in the Nampa, Southwest and Airport submarkets.
Boise’s 1% industrial vacancy rate is one of the lowest in the nation. Average rent increased by 2.5% year-over-year in Q1 to $9.71 per sq. ft., while net absorption totaled 758,000 sq. ft.—more than half last year’s annual total of 1.5 million sq. ft. Total demand this year is expected to exceed last year’s based on continued strong e-commerce and third-party logistics demand.
Figure 4: Boise Historical Data
Figure 5: Boise Size Range Comparison