ADVERTISEMENT

ADVERTISEMENT

Commercial rent prices drop during oil slowdown

During the oil boom North Dakota had some of the highest rent prices in the country, but with the oil slowdown prices have dropped in commercial and housing rentals.

During the oil boom North Dakota had some of the highest rent prices in the country, but with the oil slowdown prices have dropped in commercial and housing rentals.

"When we have more supply and less demand, it's going to be cheaper," said Shirley Dukart, a broker with Home and Land Co. in Dickinson. "Whereas we had a lot of demand and less supply. Some of the oil companies pulled out until oil prices come back up. So they are renting out their buildings instead of selling them so they could get them back."

Dukart said she would estimate that commercial rentals have dropped somewhere around 30 percent in the past year because of supply and demand.

She said that inquiries are still strong from people interested in moving to the area and setting up shop.

"People are planning on coming here in the next six months," she said. "It started last fall, maybe October or November when we were getting more and more inquiries. So something is happening."

ADVERTISEMENT

HLC has 23 commercial properties for rent currently.

She said that prices are anywhere from 65 cents a square foot to $8 a square foot per year.

Rental prices vary on what the rental space has which could include offices, restrooms, bay doors, etc., she said.

Two properties listed on the online website loopnet, show leases more than 20 dollars per square foot per year.

Those properties include a vacant spot at Plaza 619 and American West Plaza.

Rent prices on those properties would be between $2,300 and $2,780 per month.

Dukart said that commercial leases that once went for $5,000 a month are now being rented for around $3,000.

The decrease in rental prices comes on the heels of an increased supply of commercial buildings that are now left vacant.

ADVERTISEMENT

A Dickinson and Stark County Economy at a Glance distributed by Stark Development Corporation shows that only three commercial structures were permitted in October 2016 while 20 structures were permitted in October 2015.

The report also shows an employment rate in Stark County similar to pre-boom with 18,225 people employed in the county. In November of 2012, 18,332 people were employed in Stark County.
Gaylon Baker, executive vice president of Stark Development Corporation, said that Dickinson is on the right path.

"How do you compare a boom year to a post-boom year?" he said. "Of course, the numbers change dramatically, but you have to think deeper than that. You have to think, 'What kind of a community do you have?' During the boom, I think we managed quite well. And now we are kind of post-boom, and we're in the production period, and we have managed to preserve a wonderful community with a lot of assets that we did not have prior to the boom, and those assets will serve Dickinson and Stark County for a long time."

He said that new smaller businesses are looking to call this area home, as opposed to the big energy players that made up a significant chunk of the economy during the boom, but Baker said both sizes of companies can find a place in Dickinson now.

"Any industry, actually, can come into Dickinson, Stark County and find a qualified workforce, available good buildings, great industrial sites some of them with great rail access," he said. "We have a very good position that we are in as far as developing the economy further along."

Related Topics: DICKINSON
What To Read Next
Neil Joseph Pfeifer was released Friday, Feb. 3, on $5,000 cash bail.
State lawmakers hear from both sides as parents and educators weigh in on the potential impact of the bill
“We see that when things happen in the coastal areas, a few years later, they start trending toward the Midwest,” said Rep. Ben Krohmer, serving his first term in the House.
Stark County prosecutors prepare for pretrial conferences and jury trials scheduled for March