Statewide commercial leasing: sizing up the urban markets.

• Author: Evans-Dinneen, Laurie
• Position: REAL ESTATE

As 2013 faded away like crumpled holiday trimmings and 2014 is the shiny new thing with the lure of promise and resolution, momentum is in the air. The real estate and business experts were polishing reports on trends and patterns for fresh release in January, and business owners and start-ups are making important decisions on expansion or opening, if they will move or close, or remain status quo.

Taking stock of commercial leasing inventory across the state at the close of 2013, there is room for growth and change throughout the urban centers. While business may remain fiat, there is movement happening, including new construction and retail leasing, and there are exciting new brands coming to Anchorage. To inform the conversation for commercial leasing and to look at availability around the state, there needs to be a mention of Class A, Class B, and Class C space.

In brief, Class A buildings represent the highest quality buildings in their market, are well located, have good access, and are professionally managed, thus they attract the highest quality tenants and command the highest rents. Class B buildings are a little older but still maintain quality management and tenants. Class C buildings are older usually more than twenty years old, can include warehouses and older homes, are usually located in less desirable areas, and require extensive renovation.

At the start of each year, market researchers and forecasters work to pinpoint their annual advisories and provide a glimpse into the future. Chambers of commerce and the Building Owners and Managers Association host luncheons with experts at the start of each year.

Spotlighting commercial lease markets from Southeast on up through Fairbanks, there are several similarities, but each market is unique. The time-tested adage, "location, location, location" still holds true. Particularly, there are still plenty of tenants who want to be within walking distance of downtown and who want to attract those customers or employees who want to be in thriving city centers. Those who want more parking and amenities look to areas where parking lots exist or can be added. Additionally, most Class A property in Alaska is more Class B+, since there are few true Class A properties outside of Anchorage.

Juneau

Juneau is having its share of boom right now, or at least it is not in a bust. Because of its aging and historic downtown, most of its high end leases would be classified as B+. At press time in...