Prospects at the Port Anchorage is Alaska’s business hub and home to the only intermodal port facility in the state – the Port of Alaska. The facility handles an estimated 90 percent of merchandise goods for 85 percent of Alaska’s populated areas, making it the state’s primary commercial gateway. Still, the Port is currently operating at 40 percent capacity: Its infrastructure is still able to absorb significantly more business. This presents numerous opportunities for heavy-volume projects, even as the Port modernization project rebuilds and reinforces the existing facilities. The Port of Alaska is on the cusp of transformation and is ready, willing and able to participate in creative partnerships.
Retail space revival While projects relating to health care and national defense have been on the rise, the past few years have seen a steady decline in overall construction spending. In 2017, the total value of construction spending in Alaska is projected to be $6.5 billion, a 10 percent decrease from 2016. Vacancy rates are expected to rise 2 percent in 2017, according to Jack White Realty. The slight vacancy rate increase in Anchorage’s previously tight commercial real estate market presents numerous opportunities for creative developers. In 2018, work will begin on the redevelopment of 13 city acres into a vast complex with a 70,000-square-foot grocery store, a hotel, apartments, condos, medical offices, shops and restaurants. A building that formerly housed the municipal health department is set to be torn down and transformed into a senior housing complex featuring rooftop patios and solar panels. The complex would also include a pharmacy, café, bistro and several retail shops. Across town, national clothing retailer Duluth Trading Co. is remodeling a storefront once occupied by Sports Authority. There is currently approximately 5.5 million square feet of available building space in Anchorage, presenting a wide range of retail opportunities. The Mall at Sears — located on the busiest intersection in Anchorage – currently 113,000 square feet of available space, spread across three loading docks and two stories, with 98,000 square feet of ground-level retail space and 28,000 square feet of upper-level space. There are also several plots of vacant land with over 100,000 square feet situated in prime retail locations, ripe for development.
Alaska Liquefied Natural Gas Pipeline Project progresses It is no secret that the State of Alaska has been in a recession for the last several years, but the economy is slowly stabilizing and there is light at the end of the tunnel. In October, two years into the recession, Alaska’s unemployment rate stood at 6.7 percent, still significantly lower than the 10 percent national unemployment rate experienced at the height of the last U.S. recession. Now Alaska job losses are slowing. In 2016, 2.3 percent of Alaska jobs were lost. In 2017, the Alaska Department of Labor and Workforce Development predicts the rate will shrink to 2 percent. Experts are expecting the economy to flatten out, bringing the state out of recession by 2020. Because Alaska is a resource-rich state, with multiple new projects and discoveries on the docket for development, Anchorage has the potential to rise even more quickly. One major project, Gov. Bill Walker’s proposed Liquefied Natural Gas (LNG) development, includes construction of a gas line, processing plant and LNG facility valued at more than $35 billion. While still in the works, the project is a public-private partnership with the potential to create 12,000 Alaska jobs, attracting $1 billion in outside spending and generating $400 million in direct wages and salaries annually. The project would have a ripple effect across Alaska, bringing growth to the economy and new opportunities in Anchorage, a logistics hub for the entire state of Alaska thanks to the Port of Alaska and the Anchorage International Airport.