Commercial property prices hold up despite new construction

Work continues on the Texas Roadhouse restaurant on Friday, December 6, 2013, at Tikahtnu Commons. The restaurant is slated to open in February of 2014.

ERIK HILL Anchorage Daily News Buy Photo

Anchorage logged $631 mil- lion in new building permits in 2013, a 40 percent increase over 2012 construction, according to data presented by architect Brian Meissner at the Building Owners and Managers Association's annual commercial real estate forecast luncheon Friday.

"2013 was as big as the years before the bust," Meissner said.

Major construction projects under way around the city include hotels, office buildings and retail space.

Commercial vacancy rates throughout the city generally went down in 2013, said Brandon Walker, an associate at Pacific Tower Properties in Anchorage. Retail vacancy rates are just more than 4 percent, lower than the national average of 7.7 percent, he said.

National retailers that set up outlets in Anchorage in 2013 included cosmetics giant Sephora and designer Michael Kors. Walker said a number of other national brands have plans to open in here in 2014: Cabela's, Bass Pro Shops, Hard Rock Cafe, Texas Roadhouse and Tilted Kilt Pub and Eatery.

Industrial vacancy rates fell below 2 percent in 2013, Walker said.

Speaking of the city's available commercial properties, Walker said, "Much of the inventory right now is plagued by obsolescence. This is limiting the already limited supply of properties."

Fortunately for the city's commercial tenants, Walker said, they haven't seen an upswing in rents as a result of the decrease in vacancies.

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Commercial property prices hold up despite new construction