September 25, 2026

Bozeman Isn’t Short on Real Estate Demand. It’s Short on Real Estate Space.

A Q2 2026 commercial market recap, based on the Greater Bozeman Commercial Real Estate Market Report by ERES Companies.

If you’ve been trying to lease office space in Bozeman lately, you already know the punchline: there isn’t much of it. If you own an apartment building, you’ve probably noticed vacancy finally starting to ease. And if you’ve been eyeing an industrial bay near the airport, you should stop reading this and go call someone.

Here’s what stood out most from the Q2 2026 report.

The one-sentence version

Office, retail, and industrial are all sitting at roughly 1% to 3% vacancy with very little new inventory coming online. Multifamily is the sector everyone loves to worry about but it’s actually healing the fastest of any asset class in the market. Different problems, same root cause: supply isn’t keeping up with demand.

Commercial: about as tight as it gets

Office
Bozeman absorbed 174,000 square feet of office space over the past year against just 36,000 delivered. Only 33,400 SF is currently under construction, well below the 81,000 SF ten-year average. The standout transaction of the quarter: 1905 W College Street, which sold for $9.4M at $704 per square foot and a 6.2% cap rate.

Retail
Strip centers are sitting at 0% vacancy. General retail is close behind at 0.8%. About 86,000 SF is under construction, with a 63,000 SF delivery expected in November. There is almost nowhere for a displaced tenant to go.

Industrial
Vacancy fell 90 basis points year-over-year to 2.8%, with logistics users leading 88,800 SF of absorption. The single largest industrial transaction of the year: Bridger Aerospace’s 118,000 SF lease at 90 Aviation Lane. Cap rates here are running around 9.4%, a real spread over the 7.3% national average.

For owners of commercial space, the leverage is squarely on your side right now.

Multifamily: the sector with the click-bait headline and the best trendline

A 12.4% vacancy rate sounds rough. But the trajectory is the actual story.

Vacancy peaked near 20% in early 2025
It has since fallen 560 basis points to 12.4%
It’s forecast to drop to 10.7% by year-end 2026
1,103 units were absorbed over the past year against only 728 delivered

Average asking rent sits at $2,165 per month, still roughly 20% above the national average, even as market-rate construction has effectively stalled. What’s getting built right now is workforce housing: projects like Hidden Creek and Rocky Mountain Flats are part of more than 1,000 affordable units in the pipeline, but the market-rate side is quiet.

Sales activity reflects the improving picture: $22.3M in multifamily transactions over the trailing twelve months, averaging $275,000 per unit, the highest sales volume of any commercial sector in the report.

For investors, this looks like one of the clearer value setups in the market. Buying into a lease-up phase while concessions are near their widest, with a stalled pipeline setting up a tighter 2027 and 2028, is the kind of entry point worth underwriting carefully.

Why this is happening

Gallatin County has 128,740 residents, the highest median household income of any Montana county at just over $100,000, record MSU enrollment of 17,165 students, and an airport that moved 2.81 million passengers in 2025. Unemployment sat at 2.7% in June, a full 1.5 points below the national rate. Four demand engines pulling at once in a market that simply isn’t building enough to keep pace.

Quick takeaways

Own commercial space? This is a landlord’s market. Renewals should reflect the leverage you hold.
Own or considering apartments? The concessions you’re working through are, per the data, closer to the end of that cycle than the beginning.
Looking to lease office, retail, or industrial? Don’t wait for a better deal. At these vacancy levels, it’s not coming.
Evaluating a multifamily acquisition? The gap between where rents are and where the pipeline is headed is worth a serious look.

Where Outlaw Realty fits into this

We have several listings that line up directly with the trends above: multifamily land in the path of the tightening apartment market, and Class A industrial in a sector already running near 2.8% vacancy.

Multifamily: Urban + Farm

Mayfly — 5.48 acres, zoned R-4, preliminary plat approved. 62 triplex, duplex, and townhome units, for-sale or for-rent.
Fallon Lot 1 — 1.4 acres just south of Mayfly. Conceptual plans for 33 units in three- and four-story layouts with ground-floor retail.
PA-18/19 — 1.5 acres directly north of Urban + Farm’s Central Park, zoned B-2M, south-facing park frontage.
PA-20 — 1.61 acres (1.34 buildable) in Phase 2, zoned B-2M, listed at $2,500,000. Construction-ready with installed infrastructure.

Industrial: Yukon Industrial Park, Phase 2 (Belgrade)
Class A industrial on Yukon Lane, up to roughly 190,000 SF divisible from 25,000 SF, 32-foot clear heights, up to 42 dock-high doors. Two miles from Bozeman Yellowstone International Airport, adjacent to a 192,800 SF FedEx distribution center, in a corridor anchored by Amazon, UPS, Bridger Aerospace, and Darigold.