Summer/ Fall 2019
EGAN EXPRESSWAY UNDER CONSTRUCTION FOR TWO SEASONS INTO 2020
Egan Drive from the bridge to the intersection of main street is now under construction with improvements that will span two seasons according to the CBJ. Two lane traffic will impact not only tour operators, but the busroutes as well through the 2020 summer season. Transit schedules will be impacted, but an effort will be made to minimize changes in the routes themselves, in a recent article published in the Empire. Periodic reports will be posted in a process designed to keep citizens informed.
INDUSTRIAL LAND INVENTORY IN JUNEAU DROPS TO NEAR ZERO
Industrial land, long identified by the Borough Assembly as the “scarcest type of land in Juneau” has dropped to near zero according to City Planners. While there is a plan to eventually offer industrial tracts near the airport, other areas including Lemon Creek, Industrial Boulevard, and certain waterfront locations, this class of developable land remains very scarce in Juneau. The impact of this shortage will be to limit expansion of local business locations, and will stress the warehouse market. This has the potential of increasing the cost of goods and services in Juneau, on top of the increases in freight that northern Southeast towns have had to shoulder since 2012.
SO, YOU ARE STARTING A SMALL BUSINESS—THE QUESTION IS, WHERE DO YOU LOCATE?
More and more business owners who are looking at changing locations, expanding, or starting up–have fewer and fewer options for places to locate or relocate. In recent years, some local operators have leased spaces in the Malls, at fairly high cost, mostly because the base rates, when added to other charges of leasing that type of space –can amount to higher overall monthly rates, said one retailer who cancelled a long term lease commitment recently. While the rates for leasing spaces in Juneau are much higher for tourism spaces—especially on South Franklin Street downtown, other locations for retail are hovering around the $2.00 psf mark. That rate includes most services except janitorial and security. Future rate increases will be driven by increases in construction and land costs. Vacancies will remain low—especially for locations offering good visibility and available parking.
OFFICE LEASE RATES OF THE FUTURE –WHAT WILL THEY LOOK LIKE IN FUTURE YEARS?
Since the eighties and nineties, office lease rates have been essentially dictated by the State and Federal governments, with rates that government was willing to pay. This stable market lasted for three decades until oil revenues dropped drastically. Today, office leasing in Juneau has segmented itself by lease renewals of larger spaces with parking, mid-sized spaces with less parking, and smaller spaces downtown in backfill locations with poor visibility. Overall, the shortage of new space options has now resulted in rates that have remained flat since 2015. We predict that the future of lease rates in Juneau will begin to reflect real differences in the areas that feature different access and appeal to the agencies involved. Even with moderate job loss, we see lease rates staying steady because construction of new office space is still not feasible due to the high cost of land, labor and materials.