Bozeman Multifamily / Apartment Vacancy at 2%
Limited rental product in current market but hundreds of new units in development pipeline
A market survey conducted by Sterling Commercial Real Estate Advisors (Sterling CRE) showed multifamily vacancy in Gallatin County at 2% in the fourth quarter of 2021. A balanced market generally has a 4 – 5% multifamily vacancy rate. Rental rates averaged $2,240; however, data points for rent are limited due to lack of inventory.
“We have been tracking rising rents in Bozeman,” says Sterling CRE Research Director Sara Townsley. “Average rents are influenced by the number of units in new builds. Generally, new construction has higher rental rates and much of what is currently on the market is brand new.” As a result, apartment seekers this quarter likely saw rents up 13.5% over last year.
Multifamily development continues to expand, keeping vacancy from declining more dramatically. Over 2,000 multifamily units are in the development pipeline, though delivery dates vary. At the time of the survey, 604 apartments were under construction in Gallatin County.
“There’s no question that demand is high for Montana multifamily product,” says Ryan Springer, Sterling CRE principal broker. “As we look at different markets, we see that Bozeman lease rates are almost $10 more per square foot than other cities in the state. That’s partially due to the number of new builds in Gallatin County, which command higher rents than older apartments.”
Sterling CRE’s research team surveys multifamily market data quarterly. The team does not include the following housing types in their research: for sale residential homes or condos; complexes with less than five units; furnished apartments; short-term rentals; group living such as college dormitories or assisted living facilities; or low-income housing complexes.
For the full report on multifamily/apartment vacancy in Bozeman, email Sterling CRE Advisors.