Bozeman’s retail sector continues to lead the local commercial real estate market. With a vacancy rate of just 2.65% over the past 12 months, retail space is extremely limited—and that tight supply is expected to persist in the near term, despite a pipeline of new projects.
Rents Rising With Construction Costs
Inside Bozeman city limits, retail lease rates are averaging $27 per square foot NNN, a number pushed up by construction costs. New developments must command premium lease rates to justify rising expenses, putting pressure on tenants to either pay more—or wait longer—for the right space.
That said, long-time property owners have a distinct advantage. With lower debt loads, they can offer more competitive rents and keep their buildings fully leased, contributing to the area’s consistently low vacancy.
Location Is Everything
Retail performance in Gallatin Valley is extremely location-sensitive. High-traffic corridors, signalized intersections, and prominent corners remain in high demand. Businesses looking for visibility and foot traffic may find themselves competing for a limited pool of suitable spaces.
Belgrade Emerges as a New Hub
In nearby Belgrade, projects like The Foundry and West Post are drawing national attention—with brands like Chipotle, Starbucks, and Tractor Supply already committed. These developments are setting the stage for substantial growth in Belgrade’s retail footprint and will likely shift more tenant interest to the area in the coming quarters.
Advice for Tenants
If you’re a business owner looking for a retail storefront in the Gallatin Valley, expect a longer-than-usual search. With such tight vacancy, we often encourage clients to pursue the 70% solution—a space that meets most of their needs and gets them operating in-market, even if it’s not a perfect match.
Watch the video below for more local insights, and connect with SterlingCRE for help selecting a location or reviewing your retail portfolio.
