LEASE SURVEY REVEALS WEAKNESS IN DEMAND FOR JUNEAU OFFICE SPACE. The owner of a major office building in Juneau tasked a Seattle based appraiser this October with completing a survey of leasing activity as observed by several local Brokers who are active in the local lease market. As one of those Brokers interviewed, we reported that leasing activity had slowed significantly, most notably in the office market. What the survey found was that since spring of 2020, and the onset of the COVID 19 Pandemic, new leasing activity has slowed on the heels of a softening market for State of Alaska leased space, and retail spaces connected with the Tourism industry. This is also reflecting the new work-at-home orders by both State Government and major local employers including native corporations, lenders and title companies. No conclusions can be made about longer term trends yet, according to a local Commercial appraiser, “because we just don’t have the data compiled to make accurate predictions,” he said. In our opinion, Juneau’s building owners are much better positioned than owners in larger office markets, because there is no current oversupply of space. As more data becomes available, we intend to share these trends with you.
LOCAL WAREHOUSE MARKET CONTINUES STRONG WITH LITTLE VACANCY. Driven in large part by the fact that until 2020, almost no industrial land has become available to build new warehouse buildings, any vacancy for local warehouse space is nearly non-existent. This means that construction companies, builders, and heavy equipment operators have little room to expand their operations or to store their equipment and inventory. The recent sale of a new, six thousand square foot warehouse on Concrete Boulevard for in excess of $2,000,000.00 took place in less than sixty days of marketing time. Three one thousand square foot spaces near industrial Boulevard leased up in less than thirty days of their completion. But the lack of more available warehouse space remains an issue for local businesses in order for them to expand and grow.
INDUSTRIAL SUBDIVISION SALES ADVANCE QUICKLY ADJACENT TO THE JUNEAU AIRPORT. With 14 lots in all, the industrial subdivision developed by Bicknell Inc. has seen an early and positive response from the market with three parcel sales taking place within the first month of marketing by the Carlton Smith Company. The sold lots range in size from one half acre to nearly two acres in size, with initial asking prices ranging from $22 to $25 per square foot including all utilities and paved access to the lots. When phase I of the subdivision is to be completed this spring, it is anticipated that most new owners will be in the construction industry, airport support and distribution.
2021 TOURIST SEASON PASSENGER VOLUME IS DEPENDENT UPON NEW CDC REGULATIONS. The Center for Disease Control, or CDC is now implementing new regulations governing how the tour ship industry deals with the Pandemic as the 2021 season approaches. They will put into place a new framework for resuming safe and responsible cruise ship passenger operations. In speaking with commercial appraisers who monitor Southeast Alaska tourism operators and their facilities, most are reluctant to speculate on what the 2021 season might look like, saying that the visitor volume predictions are “all over the map” from 20% of the capacity of the last full operating season to as high as 40-50%. However, there is agreement that no one is in a position to estimate what the next season will look like until a Covid 19 vaccine is made available, and until a major cruiseline operator is able to announce their firm operating plans for 2021.