While most people think of Idaho as "The Potato State", its actual nickname is "The Gem State", for its abundance of gems and minerals. Besides mining and agriculture, other important industries in Idaho include timber, food processing, electronics manufacturing, chemical manufacturing, nuclear energy research and tourism. The science and technology sector accounts for over 25% of Idaho's economy. What does all this mean for the commercial real estate market in Idaho? Growth.

The industrial market is hot and growing hotter in Boise thanks to the rapid growth of the nuclear research sector and other high-tech/heavy industrial sectors such as semi-conductor and microchip manufacturing. This market is marked by new construction as there remain large tracts of raw, industrial lands within Boise. Even though commercial property values have increased by 50% within the past several years, the market is still hungry for more new industrial property. The office market is slow but growing, fueled by tenant demand rather than investor interest.


The high tech employment is attracting well-educated and well-paid workers to Idaho, so housing is also hot. Idaho's housing market has been able to stay strong because demand is being fueled by an influx of residents (Idaho is the third fastest growing state in the nation) rather than speculators and because Idaho lenders did not dip much into the subprime market. Boise is already moving ahead with trendy mixed used developments including condos, retail and office space. Elsewhere, high density housing and master-planned communities are the order of the day. Even so, developers in Idaho are making a conscious effort not flood markets, and there is some concern about whether wages will be able to keep up with housing costs. There is already a nascent need for affordable housing.

Where people go, so too goes retail. The retail market is also hot in Idaho. Particularly in the larger cities like Boise, Nampa and Coeur d'Alene, retail development is bein spurred by big box retailers seeking to expand into the Idaho market. Previous retail development had been small-scale pads, and the low vacancy rates for these pads are not expected to be harmed by the new, larger scale developments. Some of the cities, like Nampa, are already talking about revitalizing their downtown areas. SO different to what's going on in most urban markets, Nampa is trying to update and expand its downtown rather than bring it back to life. Much of the development in the area is new construction.