2023 Q4 Market Update

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2023 Q4

MARKET UPDATE


03 04 05 06 07 08 09 10 11 12 13 14 15 16

About Us Our Team

Market Update 2024 Outlook

Historical Market Data Retail & Office New Listings

Retail & Office Closed Listings

Retail & Office Report Industrial New & Closed Listings

Industrial Report Industrial Report Commercial Land New & Closed Listings

Business

New & Closed Listings

Client Partners Client Services

Acquisition & Disposition, Landlord Representation, Tenant Representation, Consulting & Valuation


03

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


04

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

05

2024 OUTLOOK The economic landscape in 2023 exhibited a promising recovery, with real GDP growth of 2.8% driven by robust job gains and a surge in construction spending for manufacturing facilities. Nonfarm payrolls grew by 232,000 jobs per month on average and the unemployment rate stayed below 4% for 22 consecutive months, a remarkable feat not seen in over 50 years (Source: BLS). Despite the challenges posed by higher interest rates, 2023 witnessed strength in the services sector and real wage growth as inflation subsided, leading to positive trends for workers and momentum in consumer attitudes. The outlook for 2024 according to the IMF suggests a slightly slower pace of expansion at 2.1%. This projection reflects various factors, including a potential slowdown in consumer spending, tight monetary conditions, and fluctuations in business investment and housing activity. Consumer spending is expected to decelerate due to diminished savings, plateauing wage gains, and emerging signs of stress in specific consumer segments. The CRE market in 2023 faced challenges stemming from a labor shortage, inflationary pressures, and the continuation of Federal Reserve Bank interest rate hikes. Higher interest rates triggered increased loan defaults, causing banks to write off credit losses and expect liquidity issues to continue over the next year. In an effort to contain further losses, banks pulled back on lending – with 3Q 2023 loan volume down 7% from 2Q 2023 and down 49% from a year ago (Source: Mortgage Bankers Association). These losses had widespread impacts, affecting every sector and investor type within the commercial real estate market.

READ MORE HERE


06

Historical Market Data Yellowstone County Commercial Sales Transactions Q1, Q2, Q3 & Q4 of 2022 & 2023

Commercial Sales Transactions Year-Over-Year 140

600 576

567

129

120

500 100

95

420

400

80

300 272

277

271

296

81 57

235

68

66

60

$95.22

20 23

Q

4

20 22 4

Q

20 23

20 22 3

$11

Office

$16

Retail

$289.40

Retail

$20

*CBC Data

Q

20 23 2

Industrial

$130.15

100

Q

Q4 Average NNN Lease Rate by Type (Existing)

Office

0

Q

20 22 2

*Data provided by Chicago Title

Q4 Average Bldg Price Per SQFT by Type (Existing)

Industrial

20 23

Q

Q

1

20 17 20 18 20 19 20 20 20 21 20 22 20 23

20

20 14

20 13

*Data provided by Chicago Title

Q

0 20 22

0 16

20

20 15

100

3

40

192

1

200

324

317

94

88

200

300

0 *CBC Data

5

10

15

20


07

Retail & Office

2500 Grand Ave, Suite Q For Lease: $8/sf

Shaylee

NE W

NE W

NE W

2010 Grand Ave For Sale: $35,000

Shaylee

711 Central, Suite 24-34 For Lease: $1,355/mo

711 Central, Suite 215-216 For Lease: $2,433/mo

2950 King Ave, Suite 1 For Lease: $14-$18/sf

Michael & Nathan

1597 Ave D, Suite 6 For Lease: $1,560/mo + Utilities

Todd

NE W

NE W

Nathan

2108-2116 Broadwater, Suite 310 For Lease: $15.48/sf

Erik

NE W

1041 Main St For Sale: $1,780,000

27 Grand Ave For Sale: $393,000

Nathan

NE W

NE W

NE W

1844 Broadwater Ave, #5 For Lease: $1,500/mo

Todd

George

Shaylee

NE W

2331 Lewis Ave For Lease: $2,950/mo

Nathan

NE W

NE W

Nathan

1511 6th Ave N For Sale: $1,000,000


08

Retail & Office Nathan

SO LD

SO LD

Shaylee

2331 Lewis Ave

Shaylee

711 Central Ave, Suite 222/223

1215 24th St W, Suite 200

Michael

Shaylee

1844 Broadwater Ave, Unit 6

711 Central Ave, Suite 225

Shaylee

Shaylee

711 Central Ave #110

LE AS ED

LE AS ED

1613 Alderson Ave

LE AS ED

Nathan & Todd

LE AS ED

LE AS ED

1629 Ave D, Suite A4/A6

David & Erik

LE AS ED

David & Erik

LE AS ED

LE AS ED

134 Grand Ave

711 Central Ave #111


09

Retail & Office REPORT Class B Existing Average Office NNN Lease Rates (Under 3,000 SF) $20 PSF

$18.00

$25 PSF

$19.02 $15 PSF

$12.50

$10 PSF

$21.09

$20 PSF

$16.00

$15 PSF

$17.04

$18.79

$10 PSF

$8.50 $5 PSF

$0 PSF

Average NNN Retail Lease Rates

$5 PSF

2015

2019

2022

2023

*CBC Data

$0 PSF

2020

2021

2022

*CBC Data

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 *CBC Data

2022

2023

2023


10

Industrial George

Todd

SO LD

SO LD

Todd

8122 Stillwater Dr, Unit 11A

5229 King Ave W, E3

Bruce

5229 King Ave W, C3

Todd

5229 King Ave W, F1

SO LD

223 Erie Dr, Unit 6

Bruce

David & Nathan

4151 1st Ave S For Sale: $4,500,000

SO LD

George

5857 & 5865 Kennison Pl For Lease: $8,285/mo + Utilities

LE AS ED

LE AS ED

204 S Washington Ave, C1, Laurel For Lease: $1,700/mo

711 Blackhawk St, B1

Nathan

NE W

NE W

Todd

823 E Mancave, Units 1-6 For Sale: $600,000

NE W

704 Wagon Trail W For Lease: $11.50/sf

LE AS ED

308 10th St W For Lease: $2,000/mo

George

NE W

NE W

NE W

Shaylee

348 Nall Ave

Shaylee & Todd


11

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

$10

$11 $150 PSF

$8 PSF

$6 PSF

$138

$7.35

$6.50

$155

$100 PSF

$4 PSF $50 PSF

$75

$2 PSF

$0 PSF

2016

2019

2022

$0 PSF

2023

*CBC Data

2020

2022

2023

*CBC Data

*$13 PSF in City Limits

Total Industrial Sales By Year (Yellowstone County) 200

CAP RATE RANGE

175 159

150

50

7% TO 9%

109

100

59

52

68

81

76

85

95

55

20 17 20 18 20 19 20 20 20 21 20 22 20 23

16

20

20 15

20 14

20 13

0

*Data provided by Chicago Title


12

Industrial REPORT Total Industrial Sales Q1, Q2, Q3, & Q4 of 2022 & 2023 60

57 50

50

40

30

32

31

20

30

22 16

15

10

20 23

Q

4

20 22 4

Q

20 23

20 22 3

Q

3

20 23 2

Q

*Data provided by Chicago Title

Q

20 22 2

Q

20 23

1 Q

Q

1

20 22

0


Commercial Land

NE W

9026 Kautzman Rd For Sale: $3,168,514

Shopworld 406 Lots For Sale: $45,500 +/-

NE W

Erik

1613 E Railroad St For Lease: $1,000/mo

Shaylee & Todd

George

SO LD

NE W

Michael & Nathan

13

East Railroad St, Laurel


04 14

Business Nathan

NE W

NE W

Nathan

State Liquor Store For Sale: $8,170,000

Le Macaron For Sale: $110,000

Todd

NE W

NE W

Mike

Lawn Maintenance & Snow Removal Business For Sale: $749,000

Tree Service Business For Sale: $350,000

Todd

Two Bear Tavern, Fromberg For Sale: $399,000

NE W

NE W

Todd

2 Casinos For Sale: $799,000 (each)


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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 TRACTOR SUPPLY CO.

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 DAIRY QUEEN CHEN’S EXPRESS

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


16

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 406.656.2001 info@cbcmontana.com 3135 Meadow View Dr., Billings, MT 59102


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