Montana’s retail market in 2025 is marked by strong tenant demand, but also significant headwinds that continue to shape deal flow. Both national and local retailers are eager to enter Montana or expand their footprint in the state. Yet, the number of transactions remains constrained by cost pressures and limited vacancy.
Demand Meets Limited Supply
Retailers are pursuing opportunities in Montana’s major markets, with particular focus on high-visibility shopping centers and key intersections. Despite this, several factors have slowed the pace of new deals:
- Land values remain elevated.
- Construction costs have continued to climb.
- Lease rates are still high relative to historical levels.
- Vacancy is extremely tight, limiting available options.
The result is a market where interest is strong, but execution is more gradual.
Advice for Retailers: Patience and Preparation
For retailers looking to expand into Montana, the key is patience. Commercial leases often run five to ten years, making it essential to wait for the right opportunity rather than rushing into a constrained deal.
There are early signs of easing pressure: new construction is beginning to deliver, lease rates are showing slight softening, and land prices are starting to adjust. Retailers should:
- Continue surveying the market regularly.
- Track centers and intersections where long-term positioning is critical.
- Establish relationships with landlords now to be top-of-mind when lease expirations create openings.
Getting in front of landlords early will position tenants ahead of competitors when quality space becomes available.
Guidance for Landlords: Focus on Credit Tenants
For landlords, the current environment is favorable. Vacancy across Montana’s retail properties is very low, and demand for space remains steady. The priority should be tenant quality.
With multiple retailers competing for limited space, landlords are in a strong position to:
- Prioritize creditworthy tenants with a proven track record of strong sales.
- Secure long-term leases while market fundamentals remain favorable.
- Leverage competition among tenants to achieve competitive lease rates.
Outlook
While headwinds remain, Montana’s retail market is not in stasis. As construction pipelines deliver new options and lease rates adjust, opportunities will open for both tenants and landlords. Success will favor those who plan ahead, retailers who build relationships early, and landlords who hold firm on tenant quality.
