It’s finally happening.
After years in the doldrums, businesses are shedding their caution. Hundreds of millions of dollars of commercial construction projects are the evidence.
“It’s not just a little bit. It’s like a house on fire,” said Nancy Lemas, associate broker with the commercial real estate firm KW Commercial. “I think there’s been a lot of people sitting on the sidelines and I think they’re finally coming out.”
The Great Recession and subsequent economic malaise were a trial by fire for the Treasure Valley’s business community, Lemas said. To survive it, companies cut as much fat as they could. The ones still standing are positioned to expand, she said.
“The market is moving and people are ready and willing to do business,” Lemas said.
Clouds still lurk, of course. Some of the biggest clouds lurk overseas, because Idaho’s fate is tied to the global economy.
Uncertainty in Europe is one cause for concern, said Andrew Townsend, economist for the Idaho Department of Labor’s southwest region. Even though it’s thousands of miles away, a collapse of the Eurozone would jeopardize access to investment capital, Townsend said.
The slowdown in China’s economic growth is another concern. China buys a lot of Idaho products — particularly agricultural and high-tech goods, Townsend said. A sluggish economy there could dampen demand for goods made here.
Even the construction of major commercial buildings in the Treasure Valley will have some adverse effects, said Matt Mahoney, managing member of Lee and Associates, a commercial real estate company.
As new buildings open, Mahoney said, they will draw tenants from existing buildings. That will produce vacancies that landlords would rather fill, he said.
The good side is that those vacancies can prod other businesses that are considering opening new locations in the Treasure Valley.
“There is an opportunity maybe to draw somebody in. Will that happen? Not really sure,” Mahoney said.
Still, nobody’s complaining. Compared with the past four years, the business climate is positively sizzling, experts say. “What’s really driven our market is the tremendous amount of money the banks are trying to loan,” Lemas said.
Instead of going gun-shy as they did in the wake of the 2008 meltdown, Lemas said, banks are now looking for opportunities to loan money.
That has helped drive a turnaround in activity and psychology, Lemas and Mahoney said. But don’t expect a return to the days when cheap money fueled the outlandish escalation of real estate prices and, ultimately, the crash that led to the recession.
“The tempo feels good. It feels like it’s strong and steady, not so much a shot in the dark,” Mahoney said.
Sven Berg: 377-6275
