Boise Has Been Discovered!

Boise has been experiencing a lot of growth recently and as commercial real estate advisors who specialize in working with new companies either considering moving here or actually moving here we are frequently asked: “Who is moving here?”

Last year in the Kiplinger newsletter the authors said Boise was ‘attracting high tech workers and firms fleeing high tax areas”. Any time I see the Intermountain West, or Idaho or Boise mentioned in the media it catches my eye. And this one particularly got my attention. For some time before this appeared, we had been talking to other commercial real estate brokers in cities like San Francisco, Seattle and Portland to introduce Boise as an alternative location for their client companies to operate at a lower overall cost. In our approach, we were focused on lower office rents and occupancy costs. For example Seattle and Portland’s downtown Class A office rents are $35.00 to $45.00 per square foot per year. And during that same general time, the San Francisco Business Times ran a short article that shared that San Francisco Class A rents had hit an average of $73.00 per sf. In that article, the research source said that San Francisco had eclipsed New York City as the most expensive city in America to lease office space.

Wow! At that time our Boise Class A office rents were between $20 to $22 per sf. We were a third of San Francisco rents and maybe two-thirds of Seattle and Portland rents.
Surely an economic reason could be made for tenants from those cities to at least look at Boise. But we got no traction back then. Rather we were told it was all about the availability of talent and the need for a deep labor pool. Boise wasn’t perceived as having that depth of talent. In places like San Francisco, there are a lot of tech workers employed by many technology companies that form their labor pool (I personally wonder if the term labor pool wasn’t a code word for companies to recruit or steal employees from?)

Slowly and finally, some of our fellow broker friends in these markets started to mention that Boise is coming up in conversations with their tenant clients.

And then, as we moved through 2018, we began to be engaged by companies planning to move to Boise…for the reason mentioned in the Kiplinger Newsletter, but other reasons as well. Before we were told by these companies that Boise was maybe one of three or four cites being considered. Now it was “We are coming to Boise.” The high cost to do business, the many layers of red tape, the high taxes and cost of living in the coastal cities were having an effect.

We have a married daughter living in San Francisco and travel there often. On one flight I sat next to a group of people who worked for a company based in the Bay Area who had bought one of our successful startup companies. The lady sitting right next to me was in HR and was gushing on about how great Boise was and how affordable the housing was. She said her younger employees could finally afford to buy a house. She lived in San Mateo and said that her 1300 sf house in her neighborhood would cost 1.3 to 1.5 million dollars.

In the last 12 months here is a sampling of companies we have assisted in relocating to Boise:

1. A Financial services company relocating from Seattle/Bellevue because of very high business operation costs and because they had challenges hiring new talent. They said that Amazon and Microsoft were the 800-pound gorillas who attracted most of the available, qualified hires. For each job opening, they may get one or two qualified applicants. Early on they did some ‘test hiring’ in Boise and found dozens of quality applicants for each job.

2. A large West Coast-based accounting firm opening an office function in downtown Boise. But, this firm wasn’t coming to Boise to get new business here. They wanted a place that had lower operating and occupancy costs plus the ability to hire new accounting grads so they could serve their existing California clients.

3. A defense contractor based in the Bay Area needing 100,000 SF of industrial space for product storage, development, and research. They came to be closer to their local military customer and enjoy lower costs to operate their business and lower cost of living for their employees who will move here. And speaking only for myself and as a former MARINE, I suspect that being in a more pro-military state had some appeal.

These are only a sampling of some of the 8 to 10 such companies we have or are working with that fit into that original Kiplinger article. It seems Boise is finally not only on the radar but on the ‘to do’ list!

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