Spotlight: North Dakota
the roughrider state has had a pretty sMooth ride lately. low uneMployMent
and a booMing oil industry have coMbined to Make north dakota an econoMic
superstar with a $1 billion state-budget surplus.
Per-capita income in the state has increased by more than 50 percent in the past decade, lifting the
state from 38th to 17th in the nation in that category. Much of this prosperity comes from oil-industry
revenues, which increased from $4.2 billion in 2005 to $12.7 billion in 2009 while also creating 13,000
new jobs. The North Dakota Department of Mineral Resources estimates that there are at least 4. 3 billion barrels of oil in the state’s reserves and expects 5,500 new wells to be drilled in the next 20 years.
But it’s not all oil in North Dakota. The state’s 2010 crop was valued at $7.44 billion, an increase of 36 percent
from 2009. In addition, state exports totaled $2.5 billion in 2010, a 15 percent increase from ’09.
Tourism also has seen an increase recently and accounted for $176.9 million in visitor spending in ’ 10.
Lodging had a 5.1 increase in business from ’09, and visits to major attractions increased by 8 percent.
Those numbers likely will not hold for 2011, however, because of flood damage throughout the western
part of the state.
Fargo Apartment Market
FARGO APARTMENT VACANCy AND RENTAL RATES
Since the 2000 census, Fargo has
added almost 15,000 people to its
population, making it the only city
with more than 100,000 people in
North Dakota, according to the U.S.
Census Bureau. That population has
kept Fargo’s apartment market tight.
Vacancy rates have declined steadily
from 5. 3 percent in fourth-quarter ’09
to 4 percent this past second quarter,
according to Reis Inc. Average asking
rents also improved, increasing from
$676 per month in fourth-quarter ’09 to $685 per month this past second quarter.
Source: Reis Inc.
New construction may change this, however. According to the Greater Fargo Moorhead Economic Development Corp., multifamily building permits increased 463 percent from July 2010 to this past July
— from 80 to 450.
Despite a booming economy, retail properties in North Dakota still face difficulties. In Fargo, retail vacancies increased from 13. 7 percent in fourth-quarter 2010 to 14. 7 percent this past second quarter,
according to Reis. Asking rents for non-anchor properties, however, have remained fairly stable. In
fourth-quarter ’ 10, rents were $11.50 per square foot; this past second quarter, they were $11.55 per
square foot. With a downtown revitalization in mind, the Kilbourne Group purchased the Loretta Block
this past August with plans to renovate and restore the 18,000-square-foot property.
In Williston, Granite Peak Development LLC is moving for ward with plans for the 200-acre Sand Creek
Town Center, a retail lifestyle shopping district.
North Dakota had the lowest unemployment rate in the U.S. in 2010 and
was cited as the nation’s best job market by Gallup’s Job Creation Index. The
state’s unemployment rate has been
well below the national average for
the past decade and has been less
than 5 percent since 1987. In fact, the
4. 3 percent unemployment in August
2009 was the highest unemployment
rate for the state in the past decade.
Source: U. S. Department of Labor
This past August, the unemploy-
ment rate was a slight 3. 5 percent, a year-over-year decline from 3. 9 percent in August ’ 10.
3 Areas to Watch
This past August, the Turtle Mountain Band of Chippewa began work on a $30 million renovation and
expansion of the Skydancer Hotel and Casino. The
existing 16-year-old structure will be transformed into
a steakhouse and convention hall. The addition will
house a new casino floor and a hotel tower with 100
rooms. The expansion, scheduled for completion by November 2012, is expected to create 75 to 100 new jobs.
Photo courtesy DSG W Architects
The Northern Lights Addition is a 342-acre development
that will include single-family, multifamily and mixed-use
commercial development. Kadrmas, Lee & Jackson purchased the land and expect various developers to work
on different stages of the overall plan. The project could
provide 1,600 to 1,900 housing units as well as retail
outlets and office buildings. Infrastructure work and residential construction was expected to begin this past fall.
Caterpillar Inc. is expanding its plant in West Fargo. The
construction will add 225,000 square feet to the existing
plant, which remanufactures parts for mining equipment.
The expansion is expected to create about 250 new jobs in
the next three years, which will nearly double the current
workforce. The $50 million project began this past August
and is slated for completion this coming June.
“It’s not just one sector that’s been the shining star
— it’s across all property types. We’re seeing unprecedented growth in the western part of the state. Traditionally, the largest markets have been Fargo, Grand
Forks and Bismarck; but it’s these little towns where
all the activity is now. It is trickling east, however.”
sources: Bismarck Tribune, Bloomberg Businessweek, Casper Journal, Grand Forks
Herald, Inforum.com, The Jamestown Sun, MarketWatch, Minot Daily News, North
Dakota Department of Commerce, North Dakota Department of Mineral Resources,
North Dakota Office of the Governor, Reis Inc., USA Today, U. S. Census Bureau, U. S.
Department of Labor, Williston Herald, Yahoo Finance