Rapid City, SD

Market Updates
Written By Zach Ware


Hi

We wanted to share an analysis of the Rapid City market based on the trailing five-year CoStar data. Here are some key insights:

Market Overview

  • Rapid City ranks 16th among 30 markets, with significant population growth as one of the fastest-growing cities in the Midwest. This has translated into industrial employment growth.

  • The current occupancy rate is 96%, slightly below the 10-year average due to new deliveries in the late 2020s, affecting the trailing 12 net absorption score.

Construction and Employment:

  • Limited construction with only about 50,000 square feet delivered annually over the last decade, adding around 120,000 square feet in the last five years.

  • Median household income rose from $58,000 to $68,000, with a 20% increase in industrial rents, reflecting strong demand despite low rent growth rankings.

Economic and Employment Highlights:

  • The largest employers include Monument Health and Ellsworth Air Force Base, the latter of which is undergoing a $1.5 billion expansion, bringing 4,000 servicemen to the area.

  • Acer Technologies is setting up a new Gigafactory, adding 400 jobs.

  • The city benefits from its proximity to recreational areas, appealing to retirees and boosting the local economy.

Challenges and Opportunities:

  • The affordability of housing is a concern, with Rapid City being one of the more expensive markets for locals.

  • The Black Hills Industrial Park is a major development project, with Acer Technologies as the key tenant, signaling a shift towards larger industrial spaces.

  • The local economy could benefit from partnerships with organizations like Elevate Rapid City to identify land for development and connect with potential new employers.

Conclusion:

Rapid City shows promising growth potential due to its strategic location, economic developments, and demographic shifts. However, addressing housing affordability and expanding industrial space will be crucial for sustaining this growth.

 

Let us know your thoughts and if there are specific areas you'd like me to explore further.

 

Zach Ware
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