Business Intelligence

Business Intelligence

Trend toward multi-family residential housing seen in Anchorage

The bulk of Anchorage’s 2017 increase in residential housing came in multi-family and duplex units, according to the latest municipal building report. In total, 460 new residential units were added, up from 341 in 2016, but only six of those were new single-family homes. Total residential building activity was valued at $428.1 million, down from $466.9 million in 2016. The 2017 trend toward multi-family units in more urban, higher-density locations will likely continue in Anchorage, real estate analysts say, with several new multi-family projects planned for 2018. New single-family construction remaining at low levels mainly because of land scarcity and costs in the Anchorage bowl area.

NOT OFFICIAL YET, BUT COSTCO SET TO MOVE INTO FAIRBANKS: No official announcement has been made yet but it appears Costco will be moving into Fairbanks and into the building on College Road vacated Sam’s Club, which closed stores in Anchorage and Fairbanks. Costco signed a letter of intent to lease the former Sam’s building with the owner, Kamin Realty and the lease is reported close to being finalized. The Fairbanks Costco would have bakery, pharmacy, liquor and fresh meat sections besides its general merchandise. Costco told local business leaders that it has looked at Fairbanks for years but always hesitated because of the competition from Sam’s as well as Fred Meyer. That equation has changed now, the company said. The Sam’s closings were due to corporate restructuring and not the local markets.

ANCHORAGE COMMERCIAL BUILDING VACANCIES RISE, REFLECTING RECESSION: Anchorage office vacancy rates rose in 2017 as the community felt the effects of recession, speakers at the annual Building Owners and Managers Association, or BOMA, said in a brie ng to local business leaders. Prime office building space vacancy rose to 14.6 percent, up from 7.9 percent in 2016 and 5.8 percent in 2015. While higher in 2017 the Anchorage Class A vacancies are still close to the national average. Vacancies were lower in office space of less quality but still higher than in 2016, with vacant space of 11.3 percent in that category, up from 7.7 percent in 2016. Lease rates are holding rm for better quality Class A space at about $3 per square foot per month and about $2.50 per square foot per month for lower quality space, but landlords are now offering more perks, such as extended-lease terms, to attract and keep tenants. Many of the buildings affected have large blocks of space that were previously occupied by oil-related or engineering and other professional companies.

Retail lease rates in Anchorage took a dip in 2017, from an average of $2.10 per square foot per month in 2016 to an average $2.04 per square foot per month in 2017. Overall retail vacancy rates were estimated at 4.59 percent in 2017 with vacancies in malls at 7.16 percent (this would not re ect the recent Sears store and Sams’ Club closings). Industrial facility vacancy rates remained generally stable last year at about 2.4 percent, those attending the BOMA brie ng were told. Industrial space supply looks to remain static partly because of the recession and because of high building costs, which for metal construction are estimated at between $175 per square foot to $200 per square foot. That’s up from $120 per square foot to $140 per square foot in 2008, speakers at the BOMA briefing said.

ANCHORAGE ASSESSED VALUES DIP: Anchorage home values, in total assessed valuation, dipped slightly last year, municipal assessors said. Single family home values dropped 1.3 percent and condominium values dropped 1 percent. The valuation does not include the value of new construction, the city said. Values in Girdwood, a mainly recreational community south of Anchorage, rose slightly. It’s unclear how the new assessment will affect property taxes on individual properties.

ANOTHER CONTRACT FOR EIELSON CONSTRUCTION IS AWARDED: Watterson Construction of Anchorage landed another project at Eielson Air Force Base, building for the two F-35 squadrons to be based at Eielson. Watterson was awarded a $58 million contract to build a new F-35 hanger. The company is already working on one contract, a $19.8 million ight simulator, and is working with Fairbanks-based Callahan Construction on a $7.8 million ammunition storage facility. The Air Force plans to invest $500 million in new construction at Eielson to prepare for the F-35s, which will arrive in 2020 and 2021.

FAIRBANKS APPROVES TWO NEW LABOR CONTRACTS WITH SMALL PAY RAISES: The Fairbanks North Star Borough has approved two new labor contracts with its workers, one with management and administrative personnel represented by the Alaska State Employees Association and a second with mechanics and vehicle drivers represented by Laborers’ Local 942. Employees will receive a 0.5 percent pay raise as well as improvements in bene ts. Savings to the borough are estimated at $500,000 per year. Another contract, with the Fairbanks North Star Borough Employees Association, will be before the borough assembly in late February.

TOURISM UP SHARPLY IN INTERIOR IN 2017; 2018 LOOKS GOOD: Tourism was up smartly in Interior Alaska in 2017 and the trend looks to continue in 2018. Visitor hotel/motel revenues reported, which are a
key indicator, were 30 percent up in the rst quarter of 2017 compared with rst quarter 2016. Data for the remaining quarters of 2017 is still being calculated. Gross hotel/motel receipts, from which bed tax collections are made, show a steady upward trend, with $56.8 million spent in the Interior in 2014; $59.7 million in 2015, and $65.1 million in 2016. Explore Fairbanks, the local visitor promotion group, said the key to stimulating regional tourism growth is establishing direct air flights to more Lower 48 cities. The group is now working on getting direct flights to Phoenix, San Francisco and Los Angeles.

ALASKA POPULATION DIPS AS OUTMIGRATION TOPS IN-MIGRATION, NEW BIRTHS: Alaska’s population dropped in 2017 for the rst time in 29 years, state demographers said. The state population is now estimated at 737,080, or 2,629 below the estimate for 2016. About 8,800 more people left the state than arrived in 2017, but the net loss was reduced by new births.

WASILLA BANS DISPOSABLE SHOPPING BAGS; THIRD CITY IN STATE TAKING ACTION: Wasilla’s city council voted to ban disposable shopping bags, joining Bethel and Cordova in the adoption of local laws prohibiting the bags, which have become a public nuisance. Based on Wasilla’s action, the Matanuska-Susitna Borough postponed action on a proposed 10-cent-a-bag excise tax on retailers with sales of $1 million or more. Most of the borough’s large retailers are within Wasilla’s city limits.

ENVIRONMENTAL GROUPS FILE SUIT OVER IZEMBEK ROAD: It was expected, but environmental groups led suit against U.S. Interior Secretary Ryan Zinke on his decision to allow a road in the Izembek Wildlife Refuge, which is classed as wilderness, from King Cove to Cold Bay. Trustees for Alaska, an environmental law rm, led the suit Jan. 31, nine days after Zinke’s decision to approve the road. Zinke’s predecessor Sally Jewell had blocked the project. King Cove had been pushing for the road for years to support medical evacuations from the King Cove airport but Jewell, and environmental groups, resisted on the grounds that a road built through a federally-designated wilderness area would set precedent. The U.S. Interior Dept. Signed a land-exchange agreement with King Cove Corp. that will allow the long-planned but highly contested access road connecting the King Cove community to Cold Bay, where there is a major airport suitable for medical evacuations.

JUNEAU HOPES TO LAND COAST GUARD FAST-RESPONSE CUTTER: Juneau is hoping to land one of the new U.S. Coast Guard fast-response cutters slated for Alaska after the cutter Liberty, based in the capital city since 1988, is decommissioned in 2023. The Coast Guard has stationed two of its fast-response 154-foot Sentinel-class cutters in Ketchikan and is considering four more to be based in Alaska.

ANDEAVOR BUYS KENAI LNG PLANT FROM CONOCOPHILLIPS: Andeavor (formerly Tesoro) has purchased the former ConocoPhillips lique ed natural gas plant at Nikiski, near Kenai. ConocoPhillips had been trying to sell the plant, which is mothballed, for several years. Andeavor said it will use the plant to support operations at its nearby fuels re nery, and is “studying other options,” it said. The plant supported regular shipments of LNG to Japan from 1969 to 2012, with sporadic spot-cargo shipments made until 2015. Kenai’s mayor said Andeavor bought the plant for $10 million but neither company would confirm that.

Comments are closed.