2022 Is Fast Out of The Gate!

If we have a housing shortage, how can we continue to have record levels of sales? The simple answer is that enough existing homes are freshly coming on the market to keep pace with demand. Historically we have seen a 15% absorption rate in home sales. The absorption rate is the percentage of homes on the market that sells in any one month. For the past 12 months, the absorption rate has exceeded 32%.

As a result of continued strong demand, 2022 will see a large increase in new housing starts, new subdivisions and large multifamily developments. This spells good news for the overall Billings economy.

Other trends to watch in the Billings market include rising demand and costs in the industrial sector. States that have legalized recreational marijuana have seen a surge in demand for industrial space. As growers move into the industrial sector, some traditional industrial users are pushed out creating more demand for new warehouse space. Even without increased demand from growers, shop space continues to be in short supply. We have seen both an increase in the cost to build shop units but also a willingness by tenants to absorb higher lease rates.

Office space is most likely the biggest question mark in 2022. According to CCIM large companies with over 10,000 employees plan to shrink their office footprint in 2022. However, 40% of smaller companies plan to increase their office holdings. Continued growth in the medical sector demands attention. The Rocky Vista University will complete its 135,000 SF medical school by year’s end. Other large medical facilities are in the works along with the new Alcohol Treatment facility on 6th Ave N.

2022 maybe one for the books! Hold on for a wild ride this year!

George Warmer

George Warmer

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George Warmer is the Managing Broker of Coldwell Banker Commercial CBS, specializing in sales, leasing, and development of commercial properties in Montana. George is a licensed REALTOR® and has worked in the commercial real estate business since 2005. During that time, he has brokered millions of dollars in leasing and sales transactions. In 1987 George graduated with a Bachelor of Arts degree from USC and a MBA from the University of Denver in 1995. George's background in banking and management of personally owned businesses gave George a unique insight into the needs of his commercial clients. As a CCIM designee, George offers his clients the valuable analytical tools necessary to make sound commercial real estate decisions. In addition to handling his own commercial property listings portfolio and maintaining a large client base, George is actively involved in several trade, civic and community organizations. INDUSTRY International Council of Shopping Centers (ICSC): Member Certified Commercial Investment Member (CCIM): Member Billings Association of REALTORS: Member National Association of REALTORS®: Member COMMUNITY Billings Library Foundation: Treasurer/Finance Chair East Billings Industrial Revitalization Board: Member Downtown Rotary: Member TRANSACTIONS OF NOTE Sale: 52,000 SF Fed Ex Facility and releasing of facility Sale: 108 Acre Montana Sapphire Mix Use Development Leases: 10,000 SF Tyler Tech Lease Leases: 8,000 SF Tetra Tech Lease Leases: 10,000 SF Pizza Ranch Lease Leases: Various including Burger King, Steak & Shake, HD Water Supply, Womack, Rent A Center, Greyhound Lines, Ace Hardware and O'Reilly Auto Parts.

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