Greetings! With uncertainty surrounding interest rates, elections, and the economy, we often get the question “How are you guys doing with the commercial real estate market?”, and when asked, the person seems to have a note of sympathy in their voice. While we appreciate the concern, our business has continued as usual and hasn’t shown signs of letting up. Markets shift, pricing goes up and down, and strategies change, but our goal remains the same: be consistent in the quality of our work and keep providing the services needed by our clients. Other parts of the nation may be feeling a squeeze in commercial real estate, but our area has been insulated from it to a degree, and we haven’t slowed down much.
The numbers back that statement up as you’ll see from this year’s sales data. Through July there is an overall sales volume decrease of only 8% from last year. However, looking at the specific categories you’ll notice that they are all up except for Retail and Multifamily and those were influenced by a $23M retail and $39M multifamily sale in the first half of 2023 and these asset types are most influenced by interest rate changes. Industrial properties continue to be a strong player with an increasing demand from owner-occupants but admittedly have become more difficult for investors as a high delivery of industrial lease space has hit the market in recent months. Encouragingly, office sales are making a comeback with ten transactions so far, mostly with owner-occupied buyers as well. Like the residential market, it seems that buyers are accepting interest rates where they are and making moves rather than sitting on the sidelines hoping for change.
We have seen a slight increase in leasing availability in 2024, but the demand has been there to match the increased supply. Transactions are above what we saw in 2023 and we are seeing an increase in rental rates after a decade of very little rate growth. Turn-key retail and mid-size warehouses continue to be in the highest demand. We’re starting to see new inventory hit the market, particularly warehouse and retail. There has been a noticeable increase in office space, specifically downtown, in the last 3 months so if your company is considering a move, now is the time to start your search. If you have space coming available or are looking for space, please reach out to our leasing specialist, Gina Plooster.
Significant closings in the last quarter include:
- Yak Ridge Cabins | Sale – Vacation Rental Property with Five Cabins Located by Cosmos Mystery Area
- 1745 Eglin St | Lease – Office/Retail Space Located in Rushmore Crossing
- Rush No More Campground | Sale – 80 Acres near Sturgis with a Mix of RV Sites, Cabins, and Development Land
- 1719 W Main St | Sale – Executive Office Suite Building Located in central Rapid City
- 502 Main St | Lease – Restaurant Space in Main Street Square
New listings of note:
- 2620 Jackson Blvd | 5 Suite Multi-Level Investment Building at Creekside Professional Complex - $1,650,000
- 1947 Deadwood Ave | 8,822sf High Traffic Shop Building with 6 OH Doors - $6,000/MO NNN
- 478 E Mall Ct & 4600 E Mall Dr | +/- 4 Acre Lots/BTS in the Seger Crossing Industrial Park - $650,000-$699,000
- Liberty Gate Rd | 1,850sf Retail Space w Drive-Thru, co-tenant Sentinel FCU – Box Elder - $18/SF/YR NNN
- 5955 Mt Rushmore Rd | 3,829sf Anchor Space for Office or Retail along Mt Rushmore Rd - $16.50/SF/YR NNN
- 3612 Galt Ct | New Construction Warehouse Units for Lease 2,700-5,400sf - $8.00-$10.00/SF/YR NNN
Enclosed is our list of available commercial properties and the latest market stats for Pennington County. For the most recent listing information, visit RapidCityCommercial.com, our team’s active commercial listings in the market. If you are looking for a property not on our list, we would love to help. Contact me at (605) 939-4489.
Sincerely,
Chris Long, SIOR, CCIM
Keller Williams Realty Black Hills
Enclosure
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