Last week the Wall Street Journal reported Billings as a “Boomtown” and ranked as No 1 on the WSJ/Realtor.com Housing Market Index. This may not come as a surprise to many as we are all aware of the very tight residential market in Billings and the surrounding area. However, what may come as a surprise is the unusually strong commercial market today.
So what is the other Hot Real Estate Market?
Less discussed is the continued strengthening of the commercial real estate market across product types. We have seen a number of new businesses move into the market. Most notable is the recent purchase of land by RVU for a 135,000 SF medical campus on the West end.
Other notable developments include Coca Cola’s new bottling plant off of the Zoo Dr interchange, a gas powered generation plant in Laurel and a battery facility West of Billings. The industrial sector has seen a strong increase in demand for smaller shops. A number of projects are planned to come online but have been hindered by pricing and availability of materials. Demand for industrial will continue to grow as traditional industrial users compete for available space with start up marijuana facilities. This is a trend that larger markets such as Denver have experienced.
A more surprising development is the reduction in available office space. This is counter cyclical to what is occurring in larger markets and may be a result of Billings’ hesitance to build new office space since the great recession.
What has not changed is the demand for income generating properties. 1031 Exchange replacement properties are scarce and continue to place pressure on CAP Rates. Concerns about taxes, the frothiness of the stock market and inflation are driving investors to real estate. However, like the residential market, commercial income generating properties are equally scarce. So will commercial real estate continue to be the other hot real estate market as people continue to poor into Billings Montana? That is the question for the future.
Coldwell Bankers Commercial, Agents, are available to help you navigate commercial real estate within Billings, MT.
