Fargo broker: metro commercial real estate market relatively strong despite inflationary pressures and rising interest rates

Image by WDAY News Staff - Tom Tucker
Image by WDAY News Staff - Tom Tucker

(Fargo, ND) -- Inflation has thrown a curve ball into an otherwise healthy commercial real estate market here in the FM metro, according to one commercial broker.

"Construction costs on average are up 10 to 20 percent year over year. Personally we had probably 3 or 4 projects of our clients that pulled back in 2022 because of the rising costs of construction," Andy Westby, President and Managing Broker at Fargo-based Goldmark Commercial Real Estate. 

Westby says the metro is setting in to a "new normal" and says it could take players in the industry a few months to adjust to changing conditions. Westby says he expects development to "pick up in the second half of the year" as investors and builders adjust to inflation and climbing interest rates.  

"The national headlines are all about inflation, interest rates, recession. We look at the data, you go deep on 2022, we're faring very well. We're below national vacancy levels in almost every market. We're ahead of regional competitors in almost every market. We're seeing continued investment in almost every market," said Westby.   

Westby made the remarks during the inaugural Commercial Connect event sponsored by his firm. 

Original Air Date: 
Wednesday, March 8, 2023