Greetings! We hope you have recovered from your Thanksgiving feasting and are prepared for a second round in just a few weeks. Whether your family gatherings are polite and shy away from political topics, or they’re a bit wilder, it’s highly likely that somebody had opinions about how the election results will impact the real estate market. Our conversations with buyers and sellers frequently ended up on that topic, with many people wishing to “wait until after the election” to make a move. Well, the election is over. Now what?
Honestly, not much has changed nor did we expect it to in the short term. Rates continue to adjust slowly but not at levels that cause an immediate impact. Many buyers are more optimistic about the market and the hope is that banking regulations and tax laws may be favorable, but time will tell. Locally, it looks like we are on track to have an increase in sale transactions, but a decrease in volume according to the year-to-date data. However, with some of the large, outlier sales in 2023, it seems safe to say that this year was just as strong and maybe a bit stronger than last. Industrial and Hospitality sales are drastically up from last year and we continue to see strong demand on all product types. Land sales have continued their strong consistent trend, while Multifamily and Retail are struggling slightly, being the most rate sensitive asset classes. We are eager to receive the final pieces of data from this year and excited for what 2025 holds for real estate and business growth in the Black Hills!
Commercial leasing remains consistent, with office availability ticking up in the last quarter, and retail and industrial still being in highest demand. New construction inventory is slower to fill than anticipated, but that can be attributed to the high cost of interior build outs and additional supply hitting the market. Landlords may want to consider offering a TI allowance and increasing base rents to incentivize new tenants, particularly for inventory over 3,000 SF. As we close out the year, we expect a significant number of transactions to close that have been long in negotiations, so watch for new businesses to open in the first and second quarters of 2025. As always, if you have space coming available or are looking for a new location, please reach out to our leasing specialist, Gina Plooster.
Significant closings in the last quarter include:
- 1222 Oregon St – Sale – Completely remodeled office building with 11 offices and a storage warehouse.
- 702 E North St – Lease – Stand-alone Restaurant building on E North St.
- 330 Knollwood Dr – Sale – Highly visible, 2-level office building just off Interstate 90.
- 911 E Saint Patrick St – Sale – 21,600sf of the Midland Shopping Center along St. Patrick Street.
New listings of note:
- 2828 Plant Street – 18,000sf office building in Northwest Rapid City - $2,699,000
- 1671 Rand Rd – 3,920sf Shop Building with front office space and a fenced yard - $12.00/SF/YR NNN
- 333 Heritage Dr, Spearfish – 5,300sf flex building 100% occupied by three tenants - $875,000
- 622 St Joseph & Black Hills Vinyl – Downtown real estate and/or business - $795,000/$300,000
- 907 Jackson Blvd – 2,616sf high-traffic retail/showroom building right along Jackson - $14.50/SF/YR NNN
937 E North St – 9,288sf retail or entertainment space in Dakota Market Square - $11.93/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
Click here to download a copy of our mailed newsletter. For the most recent listing information, visit RapidCityCommercial.com/