2011 Kootenai County Market Forum

8/7/2019 2011 Kootenai County Market Forum

1/163


2/163


3/163


4/163


5/163

Retail

Pat Eberlin


6/163

Agenda

Project Updates

Kootenai County Retail Sales Current Vacancy Rates Current Asking Rents Taxable Retail Sales

2010 Overview 2011 Forecast & Recommendations


7/163

The Pointe at Post Falls


8/163

EXPO at Post Falls

Riverbend Commerce ParkSpokane River

Future Beck Rd. Interchange2012 Estimated Completion

Pointe at Post Falls

- Cabelas- Wal-Mart

I-90 Exit 2Pleasant View Rd. Interchange

(46,000+ CPD 2006)

Loves Travel Center (10 Acres)Starting Construction March 2011


9/163

Post Falls Factory Outlet


10/163

Riverstone Buildings B & C


11/163

Riverstone


12/163

Riverstone Phase 1


13/163

Parkwood Business Properties


14/163

Prairie Shopping Center


15/163

Prairie Shopping Center


16/163

Silver Lake Mall


17/163


18/163

GVD


19/163

Hayden Walmart

Wi


20/163

Winco

Winco

K i C R il S l V l


21/163

Kootenai County Retail Sales Volume

$8.3 Million (Recorded in MLS)

15 Closed Transactions

K i C R il V


22/163

Kootenai County Retail Vacancy

Overall Retail Vacancy = 8.72% | 7.7 Million Sq. Ft. Surveyed

Ab i


23/163

Absorption

5

6

7

8

9

10

2009 2010

Perce

nt

Kootenai County Overall Retail Vacancy

PositiveAbsorption

C t A ki R t


24/163

Current Asking Rents

Class A BuildingsPrime locations

Newer buildings$15 - $20 per SF NNN

Class B BuildingsSlightly older buildings

Good locations$9 - $12 per SF NNN

Class C BuildingsFunctionally obsolescent

Older neighborhoods$6 - $9 per SF NNN

All rates quoted annuallyNNN = Tenants pro-rata share of common area maintenance,property taxes, insurance, and other operating expenses

T bl S l


25/163

Taxable Sales

$800,000,000

$900,000,000

$1,000,000,000

$1,100,000,000

$1,200,000,000

$1,300,000,000Taxable Sales


26/163

2011 F t d R d ti


27/163

2011 Forecast and Recommendations

Tenant Retention and Creativity Key

Reality Check Rent Concessions & Tenant Improvements Hands on Approach

Consumer Confidence on the Rise Challenges vs. Opportunity


28/163

Thank You

For Slides Email [email protected] Visit www.cbcsr.com


29/163


30/163

Office

Craig Hunter, CCIM


31/163


32/163


33/163


34/163


35/163

Class A OfficeQuality of constructionNewer buildings$16 - $21 + NNNNNN Charges $4-$6/sf

Class B OfficeSlightly older buildingsGood locations$10 - $16 + NNNNNN Charges $3-$5/sf

Class C OfficeFunctionally obsolescentOlder neighborhoods$6 - $10 + NNNNNN Charges $2-$4/sf

All rates quoted annuallyNNN = Tenants pro-rata share of common area maintenance,property taxes, insurance, and other operating expenses


36/163

$17.36$15.99

$5.52

$14.39


37/163

3,835,854 Total SF Surveyed

Coeur dAlene

Post Falls

Rathdrum

Hayden

% Vacant 5% 10%

TotalS

q.

Ft.


38/163


39/163


40/163

8680 Wayne Boulevard

Coeur dAlene, ID 838157,686 Square Feet

600 N. Thornton Street

Post Falls, ID 8385417,000 Square Feet


41/163

122 E. Poplar Avenue

2204 Ironwood Place 311 E. Mullan Avenue

1336 W. Kathleen Avenue


42/163


43/163

Based on data through the end of October 2010

Moodys/REAL Commercial Property Price Index (CPPI)National All Property Type Aggregate

Index,

Dece

mber2000=100

180

160

140

120

100

80

200


44/163

2204 Ironwood Place, Coeur dAlene, Idaho


45/163



Index,

Dece

mber2000=100

180

160

140

120

100

80

200


46/163



Index,

Dece

mber2000=100

180

160

140

120

100

80

200


47/163


48/163



Index,

December2000=100

180

160

140

120

100

80

200


49/163



Index,

December2000=100

180

160

140

120

100

80

200


50/163



Index,

December2000=100

180

160

140

120

100

80

200


51/163



Index,

December2000=100

180

160

140

120

100

80

200


52/163


53/163


54/163

Thank You


55/163

Thank You



56/163


57/163

Multi-Family

Glenn Sather


58/163

Where we are today Trends for tomorrow

Wh t d


59/163

Where we are today

Wh t d


60/163

Where we are today

New Construction Permits


61/163

New Construction Permits

Kathy Reed House


62/163

Kathy Reed House

Trends for Tomorrow


63/163

Trends for Tomorrow

Demographics Larger Tenant PoolSupply

Less Apartment Stock

Economy

More Household Formations

Thank You


64/163

Thank You



65/163


66/163

Industrial/Flex-Tech

Dani Kramer, CCIM

Industrial Market Kootenai Vs Spokane


67/163

Industrial Market Kootenai Vs. SpokaneKnow Your Competition

Kootenai Vs Spokane


68/163

Kootenai Vs. Spokane

Kootenai Vs Spokane


69/163


The state of Idaho does not have an estate tax. The state of

Washington has an estate tax with the rate ranging from 10% to

19% based upon a taxable estate value range of $0 to $9 million

and above (with some exemptions and deductions available)

Sales/use tax in Kootenai County is 6%, Spokane ValleyWashington is 8.7%

Source: Jobs Plus, Inc., State of Idaho, State of Washington, taxfoundation.org, idahosif.org

Kootenai Vs Spokane


70/163


2008 figure Idaho taxpayers pay $3,670 per capita in state and

local taxes compared to Washington taxpayers who pay $4,334

per capita

Instead of a corporate tax system, Idaho is a flat 7.6% tax on all

corporate income, Washington levies the Business andOccupations Tax, a gross receipt tax which is levied a various

rates by category


Kootenai Vs Spokane


71/163


Workers Compensation rates in Idaho are based on a per $100

of payroll. In Washington, rates are based on per hours worked.

Example of Potential Savings:

IdahoCDA MSA

Code 739000 Beer or Ale Dealer,Wholesale, Drivers

$5.23 per $100 of payroll

160 hours worked at $11.35/hr. = $1,816

18.16 x $5.23 =$94.98

Washington

Code 2105 Beer, Wine, Soft DrinkDistributor

$1.2864 per hour worked

160 hours worked = $205.83


Kootenai Vs Spokane


72/163

Kootenai Vs. SpokaneSome Relocations to Idaho - 2010

6875 W. Woodard, CDA

Coeur Lumber Group11,880 SF

314 N. 3rd Street, CDA

Kiras Kiss DesertsCommercial baking company

5,600 SF

Kootenai County Lack of Large SF Inventory


73/163

Kootenai County Lack of Large SF InventoryEXPO Industrial Post Falls

No vacant warehouse/industrial

buildings

Units available range from +-2,000

SF up to +-3,000 SF



74/163

Kootenai County Lack of Large SF InventoryRiverbend Commerce Park Post Falls

Operating at +-94% occupiedNo vacant industrial

buildings

10,000 SF of office vacant



75/163

Kootenai County Lack of Large SF InventoryWarren K Industrial Park - Hayden

4 buildings available for lease2 buildings available for sale

All available buildings are less than 10,000 SF

Industrial Market Kootenai Vs Spokane


76/163

Industrial Market Kootenai Vs. SpokaneLarger/Older Industrial Park

www.thepark.biz

Over 120 companies

Employees in excess of 4,500

peopleOver 4.5 million SF of space

One of the largest business

and industrial parks in the

country

Industrial Market Spokane Vacancy Report


77/163

Industrial Market Spokane Vacancy Report

Industrial Vacancy Historical Average

5.5%

4.8% 5.0%5.6%

8.1% 8.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2005 2006 2007 2008 2009 2010

Percentage

YearSource: Mark Lucas, SIOR & Tracy Lucas, CCIM

Industrial Market Kootenai Vacancy Report


78/163

Industrial Market Kootenai Vacancy Report

Industrial Market Vacancy vs. Absorption


79/163

Industrial Market Vacancy vs. Absorption

2010 Industrial Market Rents - Kootenai


80/163

2010 Industrial Market Rents Kootenai

All rates quoted monthly Modified Gross = Landlord pays for property taxes and building

fire insurance. The Tenant typically pays for all other operating

expenses.

City Change from 2009

Newer Older

Post Falls $0.40 - $0.50 $0.30 - $0.40

Coeur d'Alene $0.35 - $0.45 $0.35 - $0.45

Hayden $0.35 - $0.45 $0.28 - $0.35

Rental Rate Average

Some 2010 Industrial Sales


81/163

So e 0 0 dust a Sa es

10636 N. Government Way, Hayden

6,368 SF 0.46 Acres

Sold for $275,000

1016 W. Hayden Ave., Hayden

3,260 SF 0.33 Acres

Sold for $312,500

*MLS Statistics/Info



82/163

11836 N. Tracey Road, Hayden

6,880 SF

0.59 Acres

Sold for $395,000




83/163

4909 W. Industrial Ave., CDA

6,840 SF 0.96 Acres

Sold for $287,500

115/119 E. 3rd Ave., Post Falls

11,486 SF 0.42 Acres

Sold for $383,250


Local Companies Expanding


84/163

p p g- Industrial Market -

Kuma Stoves

Completed a 17,000 SF on Old Highway 95*Picture is of their existing building on Hayden Ave.



85/163


LA Aluminum Casting Co.

Added +-10,000 SF

Total Facility is now

+- 30,000 SF



86/163


C & S Glass CompanyNew Building: +-8,500 SF


87/163



88/163


Rocky Mountain Construction Group

Expanded intoadditional 12,000 SF

Manufacturing Employment


89/163

g p y

Source: Alliance for American Manufacturing

0 100 200 300 400 500

Industrial/Manufacturing

Retail

Personal & Service

Additional Jobs Created

Job

Sector-For

Every

100J

obs

Job Sector Employment Effect on Economy

Companies Adding Employees


90/163

p g p y- Industrial Market -

Buck Knives



91/163

- Industrial Market -

Empire Aerospace



92/163

- Industrial Market -

Ground Force

Acquired Knife River Property



93/163

Source: http://lmi.idaho.gov/Employment/NonfarmJobsCES/tabid/760/Default.aspx

3,600

3,800

4,000

4,200

4,400

4,600

4,800

5,000

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10


CDA-MSA

Number of Jobs



94/163

Source: http://lmi.idaho.gov/Employment

Current Employment Estimates for Idaho: Manufacturing



95/163

-0.1

-0.08

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08 % Change from January

2006 2007 2008 2009 2010 Max Increase

Current Employment Estimates for Idaho: Manufacturing

Source: http://lmi.idaho.gov/Employment

Looking Forward to 2011 - Industrial Market


96/163

1. Rents will stabilize at lower rates

2. Vacancy will remain the same or

decrease slightly

3. Similar sales activity to 2010

Looking Forward to 2011 - Industrial Market


97/163

Life is ten percent what happens to

you and ninety percent how you

respond to it.

Lou Holtz


98/163


99/163


100/163

Investments

Mike King, CCIM


101/163


102/163


103/163


104/163

Thank You


105/163



106/163


107/163


108/163

Coeur d'Alene MSA Employment


109/163

Source: Idaho Department of Labor

0

10,000

20,000

30,000

40,000

50,000

60,000

Recession

Coeur d'Alene MSA Private Employment

Coeur d'Alene MSA Government Employment

Coeur d'Alene MSA


110/163

40000

60000

80000

100000

120000

140000

Recession Population Employment


Coeur d'Alene MSA

i b l


111/163

45000

50000

55000

60000

65000

70000

75000

Recession Labor Force Employment


2000

Drivers License Surrenders


112/163

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2002 2003 2004 2005 2006 2007 2008 2009

Arizona

California

Colorado

Montana

Nevada

Oregon

Washington

Kootenai County


113/163

Wayne County (Detroit)


114/163

Kootenai County


115/163

Spokane County


116/163


117/163


118/163

Pie I Have Eaten

Pie I Have Left


119/163

Looks like Pac-Man

Does not look like Pac-Man


120/163

CAP Rates


121/163


122/163

$2 000

Commercial Real Estate Debt Maturities


123/163

$410$310

$500

$1,800

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400$1,600

$1,800

$2,000

2008/2009 2010 2011 2012+

Billions

2008/2009 2010 2011 2012/2013

Sam Zell: Wave of distressed


124/163

assets wont come Sept. 16th conference

Interest rates are too low, banks holding on as

interest carry cost is very low

Construction is at a standstill and not expected to

recover anytime soon

Imbalance of supply & demand; still lots of money

chasing too few deals

Recommendations


125/163

Lock in Loans Risk-Return Tradeoff

K t ti l


126/163

Keep expectations low- Warren Buffett


127/163


128/163

Thank You


129/163



130/163


131/163


132/163

E i l I di f G h


133/163

Essential Ingredients for Growth

No Pressure no diamond

No Irritation no pearl

No Struggle no butterfly

No Endurance no perfection

Author Unknown

Gross Domestic Product


134/163

Consumer Confidence


135/163


136/163

US Public Debt as % of GDP


137/163

US Public Debt as % of GDP


138/163

Are you optimistic about 2011?

Yes

No

Maybe

Cautious


139/163


140/163

John Wooden

1910 - 2010

His great strength was a knack for knowing

when and what to change, and when to

leave things be

The Business Cycle


141/163


142/163


143/163

Region Banks

Region has a number of quality banks


144/163

Region has a number of quality banks

Most have sufficient capital some constrained Most must watch their concentrations in real estate

Most still have some problem assets

All have changed their underwriting fundamentalsProject valuations are lower

Loan to values 55% to 65%

Means more cash equityLower leverage

Resulting in fewer projects being built

Typical Bank Loan Rating System

f l i d


145/163

If a loan is rated:

#1 Loan - best of the best#2 Loan - strong borrower

#3 Loan - average business or individual

#4 Loan - new business - signs of weakness

Ratings 5 through 8 are regulatory grades:

#5 Other Mention - temporary problems

#6 Sub Standard - major problems

#7 Doubtful - high probability that bank will not get money back

#8 Loss - get loan off the banks balance sheet

So, we had

Th P f t St


146/163

Vacancies are up

Cap rates are up = lower project values

Rental rates have fallen

Loan requirements are more strict

Regulators are tougher Rating agencies are down grading issues

ThePerfect Storm


147/163

Coeur dAlene Public Library


148/163

Post Falls City Hall


149/163

Hayden City Hall


150/163


151/163

Sunshine Minting, Inc.


152/163

StanCraft Boat Company


153/163

Raycap, Inc.


154/163


155/163

McEuen Field Master Plan


156/163

Coeur dAlene Resort


157/163

Kroc Center


158/163


159/163


160/163


161/163


162/163


163/163

Date post:	09-Apr-2018
Category:	Documents
Upload:	mike-king
View:	215 times
Download:	0 times

2011 Kootenai County Market Forum

Documents