Despite a slight decrease in vacancies and an uptick in leases, nearly half of the submarkets Boise brokerage Thornton Oliver Keller tracks show negative absorption this year. That trend is led by Downtown Boise, where 23,900 square feet of space was vacated at Key Financial Center, 702 W. Idaho St. The brokerage expects positive absorption through 2013 but predicts office vacancies will rise with the completion of The Village at Meridian.
Office lease rates are rising, though they’re still well below their 2008 peaks.
“Speculative construction is once again occurring after a hiatus during the recession, but it has been mostly limited to two high-quality projects: The Village at Meridian, located at Eagle and Fairview, and Eighth and Main in Downtown Boise,” according to Thornton Oliver Keller’s midyear commercial real estate market analysis. “For spec construction to occur on a wider scale, lease rates must recover to near prerecession levels.”
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