The multi-family properties in the portfolio continue to have fantastic success with occupancy above market average at 95%. According to the most recent survey by the South Dakota Multi Housing Association (SDMHA), occupancy in Sioux Falls was just over 92%. Many properties managed by LPM Property Management have no vacancies, and others only have a few units remaining available. LPM Property Management increased marketing and sales efforts throughout the winter, and the market also didn’t slow during the cold winter months.
“2020 should be a strong market for multi-family,” according the SDSMA survey report issued in January of this year.
It isn’t just Sioux Falls experiencing growth. In the Rapid City, South Dakota area Ellsworth Air Force Base was recently selected to receive the first B-21 Bomber fleet, in addition to being selected as the command and training center. This is estimated to increase military presence by several thousand military, civilian and contractor personnel.
“Rapid City is experiencing an economic renaissance unique to a city this size,” said Jerry Hoffman, president and managing partner, Hoffman Strategy Group. “Ellsworth Air Force Base, financial firms such as Assurant, Green Tree and Synchrony and Monument Health (formerly Regional Health) along with successful startup business by tech entrepreneurs are anchors to an economy that is growing jobs at 1.5% per year. Rapid City also boasts an unemployment rate below 3.0%, compared to 3.6% at the national level.”
This delivers the kind of population growth most desired by any city in the United States with young, college-educated professional singles, couples and families.
“That places strong demand on housing and on different type of housing product,” added Hoffman. “For example, from dense, mixed-use buildings with apartment units above commercial space in downtown Rapid City to larger multi-family communities in the suburbs. The lack of existing housing inventory and limited delivery of new inventory will favor early market investors and developers with returns tied to above-market rents and commercial leases.”
“We have been watching both the Sioux Falls and Rapid City markets closely, and we are currently looking to expand the multi-family portfolio,” said Norm Drake, Legacy Development & Consulting Company, LLC CEO. “We are in the due diligence process on two more multi-family locations in Rapid City as well as another multi-family building in downtown Sioux Falls and another residential project in Sioux Falls. We should be able to share more about these exciting projects in the next few weeks.”
Nationwide, apartments continue to be the top target for real estate investment activity according to RealPage, INC.