Office

Pat Eberlin
CREATIVITY
Non-Farm Payroll Jobs
60 000
60,000
58,000 56,700
56 000
56,000 56,500
55,100
54,000 54,200

52 400
52,400
52 000
52,000
50,000
49,200
48 000
48,000 Non-Farm Payroll Jobs

46,000 46,000

44 000
44,000
42,000
40 000
40,000
 Office Survey Breakdown

10.03%
1,200,000

1,000,000
3.91%
800,000
Net Usaable SF

Vacant SF
600,000
, Net Usable SF
Net Usable SF

400,000 5.27%
7 70%
7.70%
200,000

0
Post Falls Hayden Rathdrum Coeur d'Alene

Source: Fall 2008 Office Survey

Auble, Jolicoeur & Gentry/Coldwell Banker Commercial
Class A Space
• Quality of Construction
• Exceptional finish, amenities and location
• M d
Modern ttechnology
h l
• Rents $18-$24/sq. ft. NNN Annual
Class B Space
• Lesser quality interior finishes and amenities
• More affordable space for tenants
• Rents $12-18/sq. ft. NNN Annual
Class C Space
• Functionally out-dated
• Lacking ADA, Parking, Technology, Location
• Rents $6-$12/sq.
$ $ ft. NNN Annual
Speculative Office Construction
• New office construction down for two reasons
• 1) The negative absorption of existing projects
• 2) Financing
New Projects Starting & Finishing in 09
• Mountain West Bank Operations Center
2 story; 28,000 SF
New Projects Starting & Finishing in 09
• The Plaza on Sherman
SEC Sherman & 7th: 6 story; 70,000 SF
New Projects Starting & Finishing in 09
• Global Credit Union
320 E Neider: 2 story; 27,400 SF
New Projects Starting & Finishing in 09
• Kootenai Cancer Center of Post Falls
2 story; 23,609 SF
Creative Minds at Work
1) Value Add Projects
Creative Minds at Work
2) Offer Affordability
• Rent concessions
• Rent
R t abatement
b t t
• Tenant improvement funds
3) Keep an open mind to retain current tenants
• Growing trend of 2009 – Current tenants asking for
decreased rent
• Maintain value of investment by offering free rent
opposed to decreased rent
• Deferring
D f i th the reduced
d d rentt amountt tto the
th back
b k end
d off th
the
lease term
• Request most recent P&Ls to verify financial distress
Creative Minds at Work
4) Flexible Build-Out
• Modular Walls with High-End Finishes
• Ability
Abilit tto E
Expand/Contract
d/C t t C Costt Eff
Effectively
ti l
• Quick Assembly/Minimal Impact
• Classified as Furniture (Faster Depreciation)
• Pros vs. Cons
2009 Kootenai County Office Forecast
- Keep open dialogue with current tenants
- Rising unemployment = Increased Vacancies
- Offer Affordability
- Limited amount of new construction will aid in
office absorption
- CREATIVITY