The Other Hot Real Estate Market

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.

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 gaspowered 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.

George Warmer

George Warmer

View all posts by George Warmer

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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