LENDERS AND BUILDING OWNERS USE APPRAISERS TO ESTABLISH THE VALUES FOR COMMERCIAL PROPERTY. Lenders and building owners typically rely on Commercial appraisers to set a value on buildings of all types. This is to give lenders the comfort they require in order to underwrite commercial loans. In today’s mid-COVID19 environment, no one has a clear picture yet of the financial impact that the virus will have on the commercial market. In Alaska, we’ve already seen dramatic impact on Hospitality properties, tourism related facilities, and the airlines. In large urban centers, national commercial real estate consultants are consistently suggesting that with more and more people working from home, urban office centers may be weakened substantially by the Pandemic. Innovations will come, but we know that long term, values may change for some segments of the market. But for now, no one knows for certain what the impacts will be.
NEW INDUSTRIAL SUBDIVISION IS APPROVED BY THE PLANNING COMMISSION. After nearly a decade long process of permitting and zoning appeals, the plat for a 14 lot subdivision at the Airport has been approved by the borough planning commission. With the recording of the plat in coming days, these lots, which range in size from one half acre to over four acres will be marketed by The Carlton Smith Company. The last subdivision of larger lots to be platted was on Concrete Way, in Lemon Creek fifteen years ago. What is important to note about the subdivision is that it will begin to address the shortage of Industrial land in Juneau for business users. This zoning classification has been identified for several years by the Juneau Assembly as the highest demand zoning for commercial use. We anticipate that the lots will be purchased by airport support service, companies, distribution and warehouse uses and construction firms.
CBJ NOMINATES ELEVEN BUILDINGS FOR POSSIBLE PURCHASE TO BE USED AS A WARMING CENTER. The CBJ has initiated a process that will evaluate eleven locally owned buildings for use as a warming center for homeless individuals. Funding for the acquisition will come from the Federal CARES act, according to Borough manager Rorie Watt. Now that the list of buildings has been developed, they will be evaluated against the criteria for their actual use. Location, condition, neighborhood issues, and cost among other elements will enter into the final decision after public input is solicited according to Watt. The Assembly is expected to make the final selection, which will take place by year-end.
JUNEAU’S LEASE MARKET SLOWS AS COVID19 IMPACTS VACANCY AND OFFICE USE. In the words of a Commercial appraiser serving Juneau, the lease market is “quiet” and trending flat, as office vacancies continue while people are working from home, and demand for office space drops off. In downtown, there remains approximately 10,000 square feet of B plus vacancy, not including 6,000 square feet of office that stands vacant near the Federal Building. In the valley, where the least amount of office vacancy may be found, the largest block of vacant space remains located at the Mendenhall Mall, while office options are more limited in Vintage Park. Rates appear to be stabilized, with B office space renting for a minimum of $2.10 psf fully serviced. The last multi-tenant office building was constructed in 2006. The lack of new construction has served to keep rates steady, while annual accelerators in lease renewals have trended down for the last three years.
AIDEA LOAN RATES HIT HISTORIC LOWS. The State of Alaska, through its Alaska Industrial and Export Authority loan program are in the three and one half percent range. Normally coupled with a conventional bank’s participation at slightly higher rates, these loans are typically used for business ventures that have the potential to employ Alaskans.