Spokane Commercial Real Estate Vacancy Rates

Nice changes in the rates this week:

Updated as of May 29, 2011.  Data source: OfficeSpace.com

As always, each firm’s estimate of vacancies is calculated in their own way and estimates vary between real estate firms. Please read the important cautions on the above estimates here – there is such a wide variation in estimates that the values used in the chart, above, seem high, while others seem low. The above data comes from weekly updates while others are monthly or quarterly reports.

Plans to re-open the Ridpath Hotel; new health science building 1/2 funded

This will be exciting if he can pull it off and funding comes together:

A Spokane man is trying to pull together a plan that would restore the Ridpath Hotel to its original luster.

via Spokane Investor Has Ambitious Plan To Reopen Ridpath – News Story – KXLY Spokane.

Washington State University

Image via Wikipedia

Separately, the state has funded 1/2 of a new health science building that would eventually develop in to a medical school in Spokane.

WSU is perhaps the biggest winner in this. WSU also is taking over the University Center in Everett and doing many other good things.

Spokane MSA Employment and Unemployment for April 2011

Note: The March 2011 unemployment estimate of 10.3 was revised by the State from the 10.5 that was reported last month.

Historical change in unemployment number March to April 2001-2011

The chart above shows the March and April unemployment rates for each year, 2001 to 2011. The yellow line shows the amount that unemployment falls every year, March to April.

Historically, the unemployment rate drops from March to April, and has done so every year since 2001, even during the worst of the downturn. The good news is that this annual spring drop has continued.

The sad news is that while the 1.2 percentile point drop looks dramatic, its less than in 2010, equal to that in 2009 and almost equal to that in 2008 and appears to be the normal, seasonal drop in spring unemployment. At least it dropped on schedule and did not go up! Including all workers (not just non-farm) there were slightly fewer jobs than in April 2010.

Year    Change
2001    0.7
2002    0.8
2003    0.4
2004    1
2005    0.4
2006    0.4
2007    0.6
2008    1
2009    1.2
2010    1.3
2011    1.2

Unfortunately, this ordinary spring drop will be reported as proof that the recession is over in Spokane and jobs are once again plentiful, even though it is on par with the drops in 2008 through 2010. In case you’ve not had your morning coffee – this is mostly the ordinary annual spring drop in unemployment. We are glad that the normal drop is still occurring in spite of continued difficult economic times.

I previously wrote about the seasonality of the unemployment number for SpokaneYear over year, in 2012, the unemployment number for the corresponding month will probably be about one percent lower than this year as the recovery slowly improves the job market situation. As seen in the chart, April 2011 is 0.6 points lower than in April 2010, and January through March were even better than that versus 2010.

I’d like to dig into the numbers even more but I have already used my allotted time for this blog this week! I’d like to look at which job categories are growing – which are likely temporary and which are likely permanent. We want to see growth in the “likely permanent” jobs as that will propel us forward for the longer term.

New Spokane International Airport Master Plan

Today, SIA will host an open house to discuss the draft of their newest Master Plan.

Forecasting is an attempt to predict the future. Management must necessarily make assumptions and guesses about the future, even though predicting the future is usually not possible. SIA has used a variety of standard methods to create their forecast, and this may come as a surprise based on my past reports, but I agree with their methodology – they have done an excellent job with this.

Here is a chart showing actual passenger enplanements (passenger boardings) from 1990 through 2010. The curve from 2011 to 2030 is the new forecast produced by the airport. The data for the above chart comes from their Draft Report.

Even better is this chart from the Draft Report showing the different forecasts produced using the different methodologies. This chart is better because it helps us understand the range of potential possibilities. As you can see, the projections span a range from a minimal increase to a doubling.

Data tidbits from the report

  • From 1990 to 2010, SIA had a compound annual growth rate of 3.42%.
  • ALL of that growth took place in 1991 to 1996.
  • From 2000 to 2010, they had a “Compounded Annual Growth Rate (CAGR) of 0.39 percent”.
  • For the period 2011 through 2030, the range of forecast CAGRs extends up to about 3.4%.
  • The new forecast moves the 3,000,000 passenger threshold from about 2018  (the old forecast) out to about 2028. That is a significant and important change.

Obviously, they (and we) hope for better results in the coming years than in the past 15 years of flat passenger enplanements!

Local promoters and media will run with the maximum forecast calling for a doubling of passengers over the next 20 years (they already have).  SIA’s passenger count did double during the preceding 20 years, but only because of 1990-1996. It’s fair to say that the forecast range is up to a doubling of passengers, but a little unfair not to mention the rest of the story … it might also be a lot less.

Previously, I showed that SIA’s year 2000 forecast was out of date the year it was issued:

Forecasting is a magic art – some times you get lucky and sometimes you don’t get lucky. The problem was not that the forecast was off but that previous management did not seem to notice and revise that 20 year plan until ten years later (2010-2011)! Forecasts are seldom right – the problem was the lack of management followup!

The new SIA director will be comparing the forecast to reality every year and making adjustments as needed. I hear he is detailed oriented and pays attention to data and data analysis.

Passenger boardings are an important economic indicator, especially for an isolated airport like SIA. As shown elsewhere on this web site, SIA (and hence Spokane’s economy) appears to have lagged behind other PNW airports such as Boise and Seattle during the recent downturn.

And once more, congratulations to SIA on their excellent forecast methodology and detailed report. Several other government agencies could learn from these folks!

My only recommendation/comment to their forecast is that they do what they can to educate local promoters and media to accurately report on the range of possibilities, and discuss how they will monitor real world results compared to the forecast.

Spokane’s Alpine College “permanently closed”

Alpine College Closes Without Warning – KHQ Right Now – News and Weather for Spokane and North Idaho |.

The DirectBuy showroom also closed last week, but the company hopes to eventually re-open somewhere else in Spokane.

Update: It’s not the first time a local for profit college has closed its doors like this. Philips Junior College also went out of business. As did Spokane Technical Institute, Trend Institute and others. A lot of small for profit colleges have disappeared around the entire state.

Sort of winding down the blog

For reasons I’ll explain in a later blog post, but mostly explained in some past blog posts – I’m gradually reducing my involvement in this blog, just as I intended to do last fall.

Besides, I hear the world is supposed to end on May 21st.

Armed Forces Torch Light Parade

The Armed Forces Torch Light Parade (also known as the Spokane Lilac Parade and Lilac Festival Parade) will be held Sunday evening in downtown Spokane.

The parade is always a lot of fun. A list of the nearly 200 parade units and the order they appear in is here (PDF).

I am amazed by the number of high school marching bands that take part, which leads to an economic observation.

In recent years, around 46 to 50 high school bands took park. But this year, there are only 36, plus the winner of the Junior Lilac Parade’s middle school marching band (and of course, the 141st Air National Guard Band of the Northwest.)  Schools across the state had to cut their transportation budgets-or parent fund raising groups were unable to raise the funds to bus their bands and auxiliary units to Spokane.

Only one high school from the west side is represented this year, and traditional bands like Wenatchee High School and others had to skip this year. We are also missing traditional floats such as the Issaquah Salmon Days Festival, and some community floats that I have seen in the past from B.C., plus local states. (I can’t find them in the parade line up sheet – perhaps they changed their name?)

The one high school from the west side – Klahowya High School of Silverdale, Wa – deserves special recognition because, unknown to most, they will march in an Armed Forces Day Parade in Bremerton, board buses, cross Puget Sound by ferry, then drive all the way to Spokane to march that same evening in our parade!

This is an odd economic data point and it is not measuring Spokane but the wider region. Separately, there’s a unique equine disease issue with the horse units this year that has, that had most horse units dropping out (see KHQ report) – but this has nothing to do with the economy!

Hope you can make it out to the parade – it is always a lot of fun.

Afterword – the Parade was great, as always. The rain held off until it started to sprinkle at 11 pm, as the last of the parade units finished up. Great job by the Lilac Festival organizers and volunteers! I had a lot of fun and everyone seemed to be enjoying themselves!