Though we don’t have all the numbers in yet for 2022, it looks like we’re on track to exceed 2021 in commercial real estate sales volume (up 1%) both for our team and for the Pennington County market as whole. While residential sales have slowed significantly due to interest rate increases, commercial hasn’t seen a lack of demand in the market, and we see prices staying stable as we enter 2023. That said, a shortage of inventory in most sectors has slowed the number of transactions, down 28% from 2021. If we see inventory increase, there is no doubt we will see those transaction numbers rebound next year. As we look at the national trends and watch other markets enter a significant shift, we feel confident Rapid City is well positioned to weather any future economic downturn as we continue to see our population grow, see new economic development and have stability that the Ellsworth growth will bring over the next 8-10 years.
On a personal note, it’s with heavy hearts that we said good-bye to Sandra Runde in May of this year. Sandi laid the groundwork for our team as the “Queen of Commercial Real Estate” through her 30+ year career. Stories of Sandi are shared regularly in our office and with all our peers, so she will certainly not be forgotten. Please keep her family in your prayers.
We are excited to announce that our new website has launched! Visit RapidCityCommercial.com to learn more about our team, get an understanding of our services and review all our sale and lease listings. Our intention was to create a site that is easier to navigate and provides relevant market information. We’d love to hear your feedback as we continue to improve the site.
On the leasing front, inventory is also at an all-time low. Many new business openings are on hold until space starts to open, and tenants looking to upsize or downsize are making things work until more inventory hits the market. Lease rates in retail and office remain steady averaging $12-$15/sf but warehouse/industrial rates have increased dramatically over the last 3 years from $4-6/sf to $8-10/sf NNN. We have tenants actively looking for warehouse suites up to 5,000sf, smaller retail spaces under 2,500sf, and mid-sized office spaces ranging from 3,000-6,000sf. If you have space that you’re ready to lease, now is a good time to get it on the market. Contact our leasing agent, Gina Plooster – Gina@RapidCityCommercial.com or 605-519-0749 – to set up an appointment to discuss.
Notable closings for our team the last few months include:
- 900 Concourse Drive – 76,136 SF office building - $6,969,092 – Purchased by Pennington County
- 1560 Concourse Drive – 5,208 SF office building - $730,000 – Purchased by C-Lock Holdings
- Steinmeyer Farms – 176.42 acre development near Spearfish - $1,600,000 – Purchased by a local developer
New recent listings include:
- Mall Drive/LaCrosse Land: 26.99 acres of development land north of the Rushmore Mall - $3,500,000
- Table 4 Decor: Party rental and event planning business - $95,000
- 353 Americas Way: 20,000sf new construction warehouse north of I-90 @ Elk Vale - $8.50/sf NNN
- 4551 Seger Drive: 23,500sf new construction warehouse on 3+acres - $8.50/SF/YR NNN
Chris Long, SIOR, CCIM
Keller Williams Realty Black Hills
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