Commercial real estate on track in Alaska: banks, real estate companies and builders give a big thumbs up.

• Author: Martin, Gary L.

Alaska has enjoyed more than a decade of continuous and steady growth and good employment in almost every segment of its economy. That includes the commercial real estate and construction industries. Experts in the banking, construction and real estate industries say that the foreseeable future should remain stable and prosperous.

The state's total construction spending this year is expected to top $5.6 billion. A construction report recently released by the Associated General Contractors of Alaska lists this year's commercial construction spending at $250 million, which includes office space, retail and warehouse space.

CONTINUED GROWTH

"What we are seeing is continued significant growth in commercial property in the Anchorage, Mat-Su and Fairbanks areas," said Brian Nerland, KeyBank's president for the Alaska district. "It's not only with existing facilities, which are being purchased and changing hands, but there is also new construction.

"It's hard to drive around Anchorage, up in the Valley or in Fairbanks and not notice all the construction work going on. Of particular note is that some of these buildings going up are major office buildings for some of the regional and village corporations.

"I'd say overall it is a very active period for commercial properties. Unfortunately, there is a shortage of land here in Anchorage, but it's just the opposite up in the Mat-Su. So you are starting to see the shift, not only in residential, but also in commercial opportunities in that area."

AVAILABLE MONEY

Pita Benz, vice president at Wells Fargo's Commercial Real Estate Group in Alaska, agrees saying that there is plenty of money out there for commercial real estate. She said that Wells Fargo does not usually get too excited about loan requests for speculative construction projects and owner-build-to-use projects. Still there is some work going on.

"There are several office buildings here in Midtown that were built several years ago on 'spec' that are just now getting filled," she said. "We are seeing activity in the buying and selling of buildings, but there really isn't much out there; they sell almost as fast as they come on the market."

She also said that internal expansion of local businesses is generating a lot of the growth now. As companies expand and become more successful, they need more office space and look for amenities that are found in class A buildings. They are the newest construction with top-notch comforts and conveniences...