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Office

Pat Eberlin

CREATIVITY

Non-Farm Payroll Jobs
60,000 60 000 58,000 56,000 56 000 54,000 52,000 52 000 50,000 48,000 48 000 46,000 44,000 44 000 42,000 40,000 40 000
46,000 49,200 52,400 52 400 55,100 56,500 54,200 56,700

Non-Farm Payroll Jobs

Office Survey Breakdown
1,200,000 1,000,000
10.03%

Net Usa able SF

800,000 600,000 , 400,000 200,000 0

3.91%

Vacant SF Net Usable SF Net Usable SF 5.27% 7.70% 7 70%

Post Falls

Hayden

Rathdrum Coeur d'Alene

Source: Fall 2008 Office Survey Auble, Jolicoeur & Gentry/Coldwell Banker Commercial

Class A Space
• • • • Quality of Construction Exceptional finish, amenities and location Modern t h l M d technology Rents $18-$24/sq. ft. NNN Annual

Class B Space
• • • Lesser quality interior finishes and amenities More affordable space for tenants Rents $12-18/sq. ft. NNN Annual

Class C Space
• • Functionally out-dated • Lacking ADA, Parking, Technology, Location Rents $ $ $6-$12/sq. ft. NNN Annual

Speculative Office Construction
• New office construction down for two reasons • 1) The negative absorption of existing projects • 2) Financing

New Projects Starting & Finishing in 09
• Mountain West Bank Operations Center 2 story; 28,000 SF

New Projects Starting & Finishing in 09
• The Plaza on Sherman SEC Sherman & 7th: 6 story; 70,000 SF

New Projects Starting & Finishing in 09
• Global Credit Union 320 E Neider: 2 story; 27,400 SF

New Projects Starting & Finishing in 09
• Kootenai Cancer Center of Post Falls 2 story; 23,609 SF

Creative Minds at Work
1) Value Add Projects

Creative Minds at Work
2) Offer Affordability • Rent concessions • R t abatement Rent b t t • Tenant improvement funds 3) Keep an open mind to retain current tenants • Growing trend of 2009 – Current tenants asking for decreased rent • Maintain value of investment by offering free rent opposed to decreased rent • D f i th reduced rent amount t the back end of th Deferring the d d t t to th b k d f the lease term • Request most recent P&Ls to verify financial distress

Creative Minds at Work
4) Flexible Build-Out • Modular Walls with High-End Finishes • Abilit t E Ability to Expand/Contract C t Eff ti l d/C t t Cost Effectively • Quick Assembly/Minimal Impact • Classified as Furniture (Faster Depreciation) • Pros vs. Cons

2009 Kootenai County Office Forecast
Keep open dialogue with current tenants Rising unemployment = Increased Vacancies Offer Affordability Limited amount of new construction will aid in office absorption - CREATIVITY