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A Market to Watch

11/12/2019

   

By: Chase Wood, Broker Associate, Legacy Development & Consulting Company, LLC

As a Broker Associate with Legacy Development & Consulting Company, LLC, I’m continually evaluating changes in markets and communities. This past year has presented new opportunities in the Rapid City, South Dakota area. This year, a third Rapid City property was added to the portfolio, a 109-unit Class C apartment complex known as the Palms Apartments. Additionally, we continue active negotiations on multi-family and mixed-use developments in Rapid City. We believe the Rapid City market is in the early stages of a new period of growth and diversifying its economy, and here is why.

Announced in March 2019, Ellsworth Air Force Base was selected as the base to house the first operational B-21 bomber unit and formal training center for the B-21 Raider. The arrival of the B-21 in the mid-2020’s is expected to bring an additional 5,000 to 10,000 people to the Rapid City area over a 5- to 10-year period. Many of these new positions will be filled by skilled workers with extensive professional and technical backgrounds. The growth of the community, schools, workforce and income will necessitate rapid investment in commercial and residential development over the next decade.

Additionally, an influx of institutional and venture capital has capitalized on the technology commercialization efforts of the South Dakota School of Mines & Technology and Ascent Innovation, creating more growth opportunities and jobs. Nearly two dozen emerging and growing businesses have relocated or have been created as a result of the community’s entrepreneurial efforts. 

The arrival of the B-21 to Ellsworth and the rapidly expanding entrepreneurial environment of the South Dakota School of Mines & Technology, combined with Rapid City’s high quality of life and South Dakota’s business friendly climate, have created the conditions necessary for continued investment in the Rapid City market. According to multiple market studies, which do not include the projected growth related to the B-21, Rapid City is facing a compressed 2 – 3% vacancy rate and a pent-up demand for 1,200 – 1,400 multi-family units and will require 100,000 – 200,000 square feet of new commercial space over the next five years according to the 2016 Downtown Rapid City Master Plan. Legacy Development, along with our stakeholders and investors, is well positioned to capture development opportunities in this and other new markets.