National chains scout Anchorage

[mthq]

By Robert Howk

Alaska Journal of Commerce

As Justin Walker watches from the roof, Ivan Kojin talks about what it's like to build the Sun Chase Subdivision in Anchorage in below-zero temperatures.

There could be good news on the horizon for doughnut and coffee lovers in Anchorage, but the housing market is tight and getting tighter.

Those were some of the messages heard by members of the Anchorage Board of Realtors and the local chapter of IREM, the Institute of Real Estate Marketing, at their annual market forecast luncheon Dec. 14 at the Millennium Hotel in Anchorage.

Some well-known national retailers are sizing up the commercial real estate market here, looking for new locations, said Bill Gee, vice president and broker with Hickel Investment Company.

"We've got a lot of restaurants coming in. TGIF just opened, Hot Licks is opening up, Krispy Kreme is looking around," Gee said. "Starbucks is looking for five new locations. We've got two new Church's Chicken stores and several more national (chains) who don't want their names mentioned yet."

The commercial real estate market for office space in Anchorage is cooking along as well, Gee said.

"We have eight million square feet of commercial office space currently in Anchorage, with a 5 percent vacancy factor," he said. "Compared to many markets in the Lower 48, we're doing pretty good because a lot of them have double-digit vacancy factors."

Most of the demand for office space in Anchorage is in the health care, financial and real estate industries, he said.

With all the current construction there will soon be an additional 455,000 square feet of office space that will be looking for occupants, Gee stated.

"The only question we have is 'can the economy support that much activity?'" Gee said. He predicted a steady growth rate for office space demand of about 2 percent per year in the near future.

"We won't be having it fill up right away, but ... it should be a good market," he said.

The retail sector has been moving along at a snail's pace, Gee said, but recently has been picking up speed.

"Some of them ran out of gas," he said, mentioning recent closures of stores including local K-Marts, the Disney Store, and the Burger King chain in Alaska.

"The plus side is, most of the problems with these closures have not been in Anchorage, but on a national scale," he said. "So it doesn't really reflect what we've been doing here."

Other national and local firms are helping to accelerate the retail market with new or expanded stores.

Gee mentioned a new Sportsman's Warehouse outlet, the remodeling of Fred Meyer stores, the new Abercrombie and Fitch store downtown, an expansion of Animal Food Warehouse, and a relocation of Hewitt's Drugs to the old McKay Hardware building on Fireweed Lane.

Home sweet condo

There is a growing feeling of urgency in the new home construction market, Robin Ward, owner of Real Estate Unlimited, told the crowd.

Land is scarce and interest rates are low, she said. "We still have a tremendous amount of buyers coming out of rentals into their first homes, and that creates a great 'move up' market."

Ward said the number of new housing units being built in 2004 will be about the same as last year, with a trend toward continued construction of what are called "site condos."

Ward said builders prefer to call them "planned communities" and builders may soon be seeing some new code requirements.

The method of construction - condensed housing on small lots with narrow streets - has stirred some controversy. Cases have been reported where fire trucks do not have sufficient room to maneuver in the neighborhoods.

"There are some new regulations on the way," she said.

She said most new home buyers want single-family homes on good-sized lots, but the market cannot handle the demand.

"We have a tremendous shortage of single-family lots," Ward said. "So their next choice will be a planned community, townhouse duplex style."

But even those are getting scarce, she said, and the next trend will be toward single apartment-style condos for first-time homebuyers.

Mark Korting, a broker/owner with RE/MAX properties in Anchorage, covered the market for existing home sales.

He said he expected interest rates to hold near their current historically low levels in 2004.

"I don't see them going up a lot," Korting said. "There has been a lot of uncertainty in the national economy, but there is plenty of money out there so rates will remain fairly low."

He said trends indicate the population of Anchorage and number of new jobs in the city will continue to increase, and that will keep existing housing sales moving at a good clip.

Korting said he was wrong in his prediction last year that housing unit sales would be flat or go down in 2003. "It was actually up, about 10 or 12 percent," he said. "So we really did quite a lot more business in 2003 than in 2002."

For 2004, he predicted a continuing upward trend of about 10 percent, which translates to approximately 5,000 homes being sold.

Home prices went up about 6 percent last year, he said, and will go up another 6 or 7 percent this year.

Busy and cold

A good example of the bustling new housing market can be found at the far east end of Dowling Road in Anchorage.

Work crews were out working briskly on a bitterly cold winter mid-January day when the Journal paid a visit to a development in the Simonian Subdivision, where 90 new three- and four-bedroom duplexes are under construction.

KND Investments Ltd. is planning a total of 180 units in the subdivision, a job foreman said.

And it is not pleasant work.

Ivan Kojin, the "lead man" on two of the new units, said frigid temperatures this month have caused tools to break and air pressure lines to freeze up.

"It's pretty tough," Kojin said, while preparing to do some roofing work.

He said he and his brother Peter and co-worker Justin Walker put in 12-hour shifts, six days a week.

"We've been out here all winter," he said. "It's hard work, but it keeps us busy."

[M II A II R II K]

Looks like the new settlements bring in new jobs and industry

[Allan]

I had no idea Anchorage was booming like it is. We don't hear much from Alaska down in the lower 48. Luckily we now have this forum, so you guys can keep us updated .

[urbanguy]

Man were are experiencing the same thing with national chains they are really killing some cool local stores but i guess thats how it goes, anyhow Krispy Kreme finally opened up on Maui and they are looking for a location here in Honolulu the reason why it opened on Maui first is because they cut a deal faster than here. Best Buy is trying to move into town but keep getting shot down because of the area they want to build on a couple blocks from me a 3 level urban Wal-mart/Sams Club is being built and set to open in the fall its one of only a few like it in the US. But we are also seeing chains from outside the country entering the market like we had the first Sarpino

[Cotuit]

In Providence we've had a depressed economy for a long time, so there aren't a lot of chains in the centre of the city. Of course we have sprawl chains out in the 'burbs, but there's not even a McDonald's downtown. The good thing is, I've only had McDonald's once in the year I've lived here (somehow I'm still a big fat slob though )

I wish that we could get a good urban discount store downtown, Marshall's or TJMaxx (I think those are regional to the Northeast). There's not a good moderately priced place to buy clothing downtown.

[urbanguy]

^I think i remember seeing TJMaxx in portland in the northwest however you live in a nice looking city ive seen quite a few pics of it i really like eastern cities theyve got a lot of brick, row homes, and cool architecture versus a lot of the sun belt or newer cities!

[mthq]

lol we also had a McDonalds in downtown that closed..

bummer huh?..

[Cotuit]

lol we also had a McDonalds in downtown that closed..

bummer huh?..

Ours didn't close, we just don't have one. There are some in other neighbourhoods that I don't go to frequently, but none downtown, not even in the mall. I can't imagine how fat I would be if I had easier access to fries!

[urbanguy]

^I love fries but i dont eat them often As for CBD restaurants man downtown Honolulu has a ton such a large variety plus it helps that the CBD is connected to Chinatown which has a lot of excellent Filipino, Thai/Laotian, Vietnamese, Cambodian, Malaysian, Korean, Indian, Japanese, Okinawan, Hawaiian, you name restaurants and in the CBD there are Greek, Italian, Algerian/Moroccan/Lebanese, to the chain type like KFC, Mcdonalds, etc i like venturing down there to eat cause many are like the ole hole in the wall type which are all nice and cozy and you can people watch. However the majority in the CBD are usually open only during the day to evenings with the exception of some in Chinatown and the old Irish area where some cool ole Irish pubs are.

[M. Brown]

If I live in HI the only thing i would eat is Generals Chicken. Yummy