BOISE — A new analysis from TOK Commercial, a commercial real estate firm that tracks development throughout the state, shows encouraging signs in the commercial real estate market as businesses look to recover losses from a business shutdown caused by the new coronavirus. But overall, market momentum remains down compared to pre-shutdown numbers.
Some commercial tenants are withdrawing requests for rent relief, according to the analysis. At the same time, rates of new development, sales and leases remain at about half the pre-shutdown rate.
Eleven percent of tenants in sectors across Idaho who requested rent relief have withdrawn their request and continue to pay rent in full.
Over 60% of those tenants indicate that funds from the Federal Government’s Paycheck Protection Program, a CARES Act program that gave more than half a trillion dollars to the U.S. Small Business Administration to disperse to small businesses, are playing a critical role in keeping leases paid in full.
Paycheck Protection Program funds can be used to pay for rent, in addition to payroll and other business necessities.
Despite the one encouraging trend, the effects of the shutdown are still being felt across the market. The number and value of new construction permits in Ada and Canyon counties are both in decline. A year-over-year comparison for March through May shows that the number of new permits is down by 50% while new permit values have declined by 30%.
Sales and leasing activity in Idaho remains in contraction at about 50% of pre-COVID-19 levels and looks to continue at this pace for the near-term, the analysis found.