2023 Q3
MARKET UPDATE
03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
About Us Our Team Market Update
2023 MIDYEAR OUTLOOK
Historical Market Data Historical Market Data Retail & Office New & Closed Listings
Retail & Office Report Industrial New & Closed Listings
Industrial Report Industrial Report Commercial Land New & Closed Listings
Commercial Land Report Business
New & Closed Listings
Client Partners Client Services
Acquisition & Disposition, Landlord Representation, Tenant Representation, Consulting & Valuation
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About Us Coldwell Banker Commercial CBS Our organization strategically combines a powerful national presence with the agility of a regional market innovator. Coldwell Banker Commercial CBS has the resources and insight to understand our local market and the expertise to convert this knowledge into tangible value for each client. Our professionals stand ready to help clients discover untapped Commercial Real Estate market opportunities and to deliver a range of services designed to add value to their businesses. Our professionals service a wealth of business categories, with clients representing established corporations to small businesses to individual investors.
www.cbcmontana.com
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OUR TEAM
GEORGE WARMER MANAGING PARTNER, CCIM, MBA
406.855.8946 george@cbcmontana.com
MIKE BRUSCHWEIN AGENT
406.697.6176 mike@cbcmontana.com
TODD SHERMAN AGENT
406.570.8961 todd@cbcmontana.com
BLAINE POPPLER PARTNER
406.671.0399 blaine@cbcmontana.com
SHAYLEE GREEN BROKER, CCIM
406.208.7723 shaylee@cbcmontana.com
BRUCE KNUDSEN AGENT
406.698.8636 bruce@cbcmontana.com
DAVID MITCHELL PARTNER, CCIM, SIOR, MBA
EMILY SPERRY
406.794.3404 d@cbcmontana.com
MARKETING SPECIALIST
406.656.2001 info@cbcmontana.com
MICHAEL SPEIDEL AGENT
406.601.9695 michael@cbcmontana.com
NATHAN MATELICH PARTNER, CCIM, MBA
406.781.6889 nathan@cbcmontana.com
ERIK CASERES AGENT
406.861.4742 erik@cbcmontana.com
Market Update
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2023 MIDYEAR OUTLOOK While the overall economy has proven to be resilient to interest rate increases, the gap between buyers and sellers on cap rates is still pretty significant, which has resulted in lower transaction volumes compared to the prior year. In conversations with Coldwell Banker Commercial professionals across the country, only a few markets are seeing sellers come down on pricing to meet buyers’ expectations and create deal terms that make sense in a higher interest rate environment. The majority of property owners prefer to hold on to their assets hoping for increased valuations over last year. Buyers are trying to put deals together but believe pricing should be 10-15% less than what sellers are asking for. Properties will move only if priced right, and even then, deals are slower to close (which is an improvement from the “no-decision” days of last year). While real estate is still a desired asset class, nervousness about timing is holding buyers back. A slowing domestic economy, rising interest rates with an uncertain end and the war in Ukraine has led many investors to park their money in risk-free bonds while they wait for values to come down. Cap rate spread over 10-year US treasury yields are below historic average spreads across all property types. Exhibit 1: Cap Rate Yield Spread Over 10-Year US Treasuries
Source: CBC Research, U.S. Department of The Treasury, CoStar.
READ MORE HERE
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Historical Market Data Yellowstone County Commercial Sales Transactions Q1, Q2 & Q3 of 2022 & 2023
Commercial Sales Transactions Year-Over-Year 150
600 576
567
129
500
9595
300
324
317 272
200
100
420
400
277
271
88
88
81
296
192
66
57
50
100
0
Q3 Average Bldg Price Per SQFT by Type (Existing)
$95.22
Industrial
Industrial
$11
$130.15
Office
$16
Retail
$289.40
Retail
$20
100
200
300
*Thank you to Flying S Title for their assistance with data collection.
Q 20 3 23
Q 20 3 22
20
Q 2 23
20 22 2
Q3 Average NNN Lease Rate by Type (Existing)
Office
0
Q
Q 20 1 23
20 22 Q
1
20 22
20 21
20 19 20 20
20 17 20 18
16 20
20 15
20 14
20 13
0
0
5
10
15
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Historical Market Data Yellowstone County
Improved Commercial Sq. Ft. Sold By Year (Millions) 7,500,000
6.89
5,000,000
3.53 2,500,000
3.79 2.96 3.14
4.58
4.24 3.35
2.41 2.38
*Thank you to Flying S Title for their assistance with data collection.
22 20
21 20
20 20
19 20
20
18
17 20
16 20
15 20
14 20
20
13
0
08
1668 Gleneagles Blvd
Mike
1302 Avenue D, Ste 103
LE AS ED
Nathan
NE W
NE W
1140 1stAve N
2331 Lewis Avenue For Sale: $575,000
Nathan
1844 Broadwater Ave
Nathan & Todd
2048 Overland, Ste 202
George & Todd
2950 King Ave W
LE AS ED
Michael & Nathan
Todd
Nathan
301 S 24th St W, #1
LE AS ED
LE AS ED
Koinonia Laundry
LE AS ED
SO LD
Nathan
Nathan & Todd
1002 10th Street W, Ste 5 For Lease: $6,335/mo
LE AS ED
1414 Main Street For Lease: $4,000/mo
410 Colorado Avenue For Sale: $1,180,000
LE AS ED
Nathan & Todd
LE AS ED
NE W
George & Nathan
NE W
Retail & Office
Nathan & Todd
2376 Main St, #802-810
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Retail & Office REPORT Class B Existing Average Office NNN Lease Rates (Under 3,000 SF) $20 PSF
Average NNN Retail Lease Rates $20 PSF
$19.02 $16.00
$15 PSF
$12.50
$10 PSF
$15 PSF
$17.04
$18.79
$10 PSF
$8.50 $5 PSF
$5 PSF
$0 PSF
2015
2019
2022
$0 PSF
2020
2021
2022
New Construction Office/Retail $40 PSF
$35 PSF
$30 PSF
CAP RATE RANGE
$25 PSF
$20 PSF
$18 PSF
6% TO 8%
$10 PSF
$0 PSF
2020
2022
2023
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Industrial
3450 Duck Creek Rd Nathan & Shaylee
2625 Overland Ave, Unit C
3465 A J Way, Unit 107
3221 Pure View Lane
NE W NE W 5229 King Avenue W, F1 For Lease: $9.50/sf/yr Shaylee
240 Nall Ave For Sale: $1,195,000 Mike
SO LD
Todd
3335 Conrad Rd, Unit 6
George
Todd
NE W
NE W Nathan
Nathan & Todd
1002 10th St W, Ste 5 For Lease: $7.10/sf (NNN)
LE AS ED
LE AS ED
LE AS ED
Nathan
8122 Stillwater Dr, Units 11 A & 11B For Lease: $775/mo (NNN)
LE AS ED
6821 Cowgirl Way For Lease: $12/sf (NNN)
5229 King Avenue W, C3 For Lease: $9.50/sf/yr
Bruce
NE W
NE W
Nathan
Todd
127 3rd St E, Hardin George
George
3221 Pure View Lane
LE AS ED
711 Blackhawk St, B1 For Sale: $162,000
Nathan
1515 4th Ave N For Sale: $600,000
NE W
NE W
NE W 125 S 80th St W For Sale: $105,000
1627 Dickie Road For Sale: $845,000
Todd
Nathan
LE AS ED
NE W
5229 King Avenue, E3 For Lease: $1,200/mo + $75 (NNN)
SO LD
1125 Maggie Lane For Lease: $9.50/sf/mo (NNN)
Nathan
Todd
NE W
NE W
George
6607 Western Way
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Industrial REPORT Industrial NNN Lease Rates Under 5,000 SF (Yellowstone County)
Industrial Sales Under 5,000 SF (Yellowstone County New Construction)
$12 PSF
$200 PSF
$10 PSF
$11
$10
$150 PSF
$8 PSF
$6 PSF
$6.50
$138
$7.35
$155
$100 PSF
$4 PSF $50 PSF
$75
$2 PSF
$0 PSF
2016
2019
2022
$0 PSF
2023
2020
2022
2023
*$13 PSF in City Limits
Total Industrial Sales By Year (Yellowstone County) 200 175 159
150
7% TO 9%
109
100
50
CAP RATE RANGE
52
59
68
81
76
85
55
22 20
21 20
20 20
19 20
18 20
17 20
20 16
15 20
14 20
20
13
0
*Thank you to Flying S Title for their assistance with data collection.
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Industrial REPORT Total Industrial Sales Q1, Q2, & Q3 of 2022 & 2023 60
57
40
32
31 22
20
16
15
*Thank you to Flying S Title for their assistance with data collection.
Q 20 3 23
Q 20 3 22
Q 20 2 23
22 20 2 Q
23
1 Q
20
Q
1
20 22
0
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Commercial Land Nathan
NE W
NE W
George
3rd & Main Street For Sale: $931,226
Bitterroot & Wicks Ln For Sale: $299,000
Bruce
NE W
NE W
George
Dickie Road For Sale: $740,000
24th St & Central Ave, Lot 2C.1 For Sale: $144,187
Nathan & Todd
SO LD
CO UN NT DE RA R CT
George
401 Bonnie Lane
72nd & Danford
Shaylee & Todd
9026 Kautzman Rd
SO LD
LE AS ED
Nathan
3250 Hannon Rd
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Commercial Land REPORT Total Commercial Acreage Sold By Year (Millions of SF Rounded) 75,000,000 66.6 61
50,000,000 46.9
35.7
25,000,000
24
22.6
21.3
15.8
14.1
11.7
*Thank you to Flying S Title for their assistance with data collection.
22 20
21 20
20 20
19 20
20
18
17 20
16 20
15 20
14 20
20
13
0
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Business
Nathan
Beer & Wine License For Sale: $39,000
NE W
Nathan
NE W
NE W
Todd
Salon at 2010 Grand Ave For Sale: $40,000
Real Estate Support Company For Sale: $199,000
George
NE W
NE W
Shaylee
Willow Creek Day Spa & Salon For Sale: $100,000
Bighorn River Lodge For Sale: $2,850,000
Mike
Sun Haven Tanning
SO LD
SO LD
Shaylee
Big Sky Beauty Supply
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CLIENT
PARTNERS BANKS FIRST INTERSTATE BANK LITTLE HORN BANK OPPORTUNITY BANK STOCKMAN BANK U.S. BANK
VALLEY FEDERAL CREDIT UNION WELLS FARGO WESTERN SECURITY BANK YELLOWSTONE BANK
RETAIL ACE HARDWARE BEARTOOTH HARLEY DAVIDSON CRICKET WIRELESS DOLLAR GENERAL HARBOR FREIGHT
MENS WAREHOUSE RENT A CENTER SHOPKO STATE LIQUOR STORE
RESTAURANTS ARBY'S CAFE RIO COCA COLA CRUMBL COOKIE JACK IN THE BOX JERSEY MIKE'S JIMMY JOHNS LITTLE CEASAR'S MAZEVO COFFEE
MCDONALD'S PAPA MURPHY'S PROOF DONUTS QDOBA STARBUCKS STEAK AND SHAKE SUBWAY TWISTED SUGAR
SERVICES ACOSTA AE2S ALL AMERICAN PHARMECEUTICAL ALLSTATE AR WORKSHOP AT&T AUTOZONE AXIOM LAW BARGREEN ELLINGSON BEAR MOUNTAIN ADI BLUE BEACON TRUCK WASH BONINI ENTERPRISES BOREALIS FUELS AND LOGISTICS BUGGY BATH CAR WASH CENTIMARK ROOFING CHICAGO TITLE CK TECH
EDWARD JONES EPIROC USA FAITHFUL DISASTER RESTORATION FASBREAK AUTOGLASS FEDERAL DEFENDERS OF MT FLYING S TITLE FORZA DEVELOPMENT HARDRIVES ASPHALT HOLIDAY/CIRCLE K KOMATSU MILLS ELECTRIC NEWMAN RESTORATION PENSKE TRUCK RENTAL PHILLIPS 66 PLANET FITNESS QUIKRETE
ROCKY MOUNTAIN VEIN CLINIC ROCKY VISTA UNIVERSITY ROTO ROOTER SECURITAS SHAMROCK FOODS SUMMER'S MCNEA AND CO. TETRA TECH ENGINEERING THRIVENT TKI INC TOWN PUMP TYLER TECHNOLOGIES VANROCK HOLDINGS VETERAN'S AFFAIRS WESTERN NATIVE VOICE YELLOWSTONE CHRISTIAN COLLEGE ZIMMER BIOMET
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CLIENT
SERVICES ACQUISITION & DISPOSITION BUYER REPRESENTATION SITE SEARCH BUILD TO SUIT LEASE/OWN ANALYSIS ACQUISITION LEASE AUDITS
SELLER REPRESENTATION LEASING SERVICES DISPOSITION LEASE ANALYSIS
LANDLORD REPRESENTATION PROPERTY POSITIONING / REPOSITIONING TENANT RETENTION TARGET MARKETING TO SUITABLE PROSPECTS LANDLORD MARKETING STRATEGIC PLANNING SERVICES NEGOTIATIONS LEASE ANALYSIS
TENANT REPRESENTATION STRATEGIC PLANNING SERVICES ACQUISITION OR DISPOSITION RELOCATION SERVICES LEASE/OWN/SALE LEASEBACK ANALYSIS NEGOTIATIONS LEASE ANALYSIS
LEASE ADMINISTRATION LEASE AUDIT BUILD TO SUIT/TENANT FIT UP CONSULTING APPRAISAL AND OTHER VALUATION SERVICES MARKET SURVEYS AND ANALYSIS SPACE PLANNING
LEASE ADMINISTRATION LEASE AUDIT BUILD TO SUIT/TENANT FIT UP CONSULTING APPRAISAL AND OTHER VALUATION SERVICES MARKET SURVEYS AND ANALYSIS DEMOGRAPHIC / DRIVE-TIME STUDIES SPACE PLANNING
CONSULTING & VALUATION OPINION OF VALUE INVESTMENT ANALYSIS FINANCIAL ANALYSIS MARKET RESEARCH LEASE ANALYSIS/RENEGOTIATION ADVISORY SERVICES BANK OWNED REO SERVICES Office Phone - 406.656.2001 Email - info@cbcmontana.com Address - 1215 24th St W Billings, MT 59102