Bozeman’s multifamily market is seeing a significant shift. As of Q1 2025, the vacancy rate has climbed to 12.5%, and that figure is expected to rise. Multiple large-scale projects are set to deliver in the second and third quarters of this year, adding more inventory to an already softening market.
Developer Caution Sets In
A key trend we’re tracking is the sharp drop in new projects entering the permitting phase. While several developments are currently under construction, the slowdown in permitting signals growing caution from developers. Many are holding off until market conditions stabilize or improve.
Why Some Properties Are Weathering the Shift Better
Older properties—and owners who’ve held them long-term—are performing notably better in this environment. These landlords have flexibility to undercut new construction pricing, keeping their buildings full even as newer projects struggle to lease up. In contrast, new developments often require premium rents to cover elevated construction and financing costs.
Incentives Are the New Normal
Rent concessions are widespread. One to two months of free rent, gift cards, TVs, and other tenant incentives are being used to accelerate lease-up timelines. It’s a necessary strategy to stay competitive, particularly for projects coming online in 2025.
Looking Ahead
If you’re a developer or multifamily owner in Gallatin Valley, now is the time to evaluate your strategy with clear, up-to-date market data. At SterlingCRE Advisors, we offer realistic, data-driven insights to help you optimize your asset or make informed decisions on future development.
Watch the video below for a full market breakdown, and reach out if you need a custom market report or valuation.
