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Despite significant economic uncertainty amidst a global pandemic, 2020 proved to be a robust year for commercial real estate activity in Eastern Idaho. Given the volatility of the stock market and the perception of inflated values, investors shifted focus to income-producing real estate in record numbers. A significant migration of investors and employees into Idaho from outlying western states has helped fuel the boom. 

In Idaho Falls, industrial, retail and multifamily projects leased up and traded at healthy cap rates. The one local exception, however, was office leasing. This is to be expected during a global pandemic, but local developers were already constructing new office projects based upon the previous year’s sub-3% Class A vacancy rate. In any other year, they would have been rewarded with quick absorption and record-high rents – but not in 2020. As the vaccine rolls out and things return to normalcy, however, we can expect projects like The Knolls and 1135 Pier View Drive at Snake River Landing to see strong leasing.

Local retail activity was quite strong in 2020. Idaho Falls finally saw Costco open in the market in August and Alturas Academy purchased the former Sears space at the Grand Teton Mall. One remaining mystery resulting from COVID-19, however, is whether the Larry H. Miller Group of Companies or Showbiz Cinemas will move forward with their planned movie theaters on the west side of town at Snake River Landing and Jackson Hole Junction, respectively. 

On the small shop front, restaurants and personal services continued to grow their footprint at locations such as Hillcrest Plaza and Sandcreek Commons in Ammon. Phase two construction on Hillcrest Plaza will commence in the spring of 2022. Demand for quality industrial products continued unabated in 2020, despite significant new construction to the market. With NuScale’s ‘Small Modular Reactor’ project making significant progress, we expect this trend will continue as INL subcontractors and vendors occupy available buildings.

The new Siphon Road I-15 interchange is complete and multiple planned developments surrounding the interchange are still in the works. Pocatello’s downtown renaissance continues into 2021, with multiple new businesses occupying and purchasing historic buildings. Meanwhile, the Bannock County residential real estate market has continued to thrive during the pandemic.

Rexburg’s long-dark former Walmart property on N. 2nd East is fully-occupied as of May 1 with CAL Ranch and Harbor Freight Tools occupying the 92,000-square foot building. Just a few yards to the north, the former Staples building at 618 N. 2nd East was purchased by Standard Plumbing Supply. Local businesses Monkey Bars and Gorgeous Garages were sold and both continue their rapid growth trajectories into 2021.

Brent Wilson, a partner at Idaho Falls-based TOK Commercial, serves on the Advisory Board for Regional Economic Development for Eastern Idaho (REDI).

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