Investment market outlook for the Boise MSA

BOISE, Idaho - Oct. 3, 2016 - PRLog -- The pool of buyers looking for quality investment product is deep, however, these offerings are in short supply. Demand for such assets will remain strong in the second half of the year, especially since many listings hitting the market today are more stable investments than were seen during the boom. Investments today are typically leased by tenants who are locked into true market lease rates, rather than inflated rates seen before the Great Recession.

Cap rates are likely to remain flat at their current low levels through the remainder of the year. If the Federal Reserve Bank elects to increase interest rates in the latter half of the year, local and national cap rates may follow suit, albeit slightly. It remains to be seen what impact the Brexit vote will have on the U.S. and Idaho investment market. Investors may be attracted to the stability of the U.S. and Idaho economy. CMBS loans signed in 2006–2007 with 10-year notes coming due will continue to supply the market with investment product over the coming 12 to 18 months.

With 1,800 units of multifamily product currently under construction, occupancy rates in apartments may dip before the end of the year, in some areas by as much as 3 to 5 percent. With increasing vacancy in some complexes, lease rates may flatten and concessions could pick up once again.