Fargo space anticipated to combat off recession, native actual property professionals venture – InForum


FARGO — Resisting national trends, the Fargo-Moorhead market is expected to buck recession forecasts and remain healthy in 2023.

That was the consensus among Goldmark company officials gathered Wednesday morning, March 8, for the company’s Commercial Connect event at the Delta by Marriott in Fargo.

In his opening remarks, Goldmark President and Managing Broker Andy Westby remarked that despite negative economic news nationally, the narrative is different in the metro area. Among the macroeconomic trends Westby and Goldmark identified were supply chain disruptions, workforce shortages, war in Ukraine and the potential hostility from China, and cash left in bank deposits rather than being invested.

Also on the list of economic disruptors has been upheaval in the residential real estate market, Westby said. Given an average mortgage payment of $1,500 per month, Westby said home buyers could afford a $346,000 home in 2021. One year later, that figure fell to $239,000.

Despite the negative national news, Westby projected that the Fargo-Moorhead area will be able to duck the recession, experiencing more of a market “recalibration.”

“The state of our market is very strong. It’s been strong in the past, it continued to be strong in ‘22. We think there may be some leveling off in ‘23, but we’re not headed for a cliff,” Westby told The Forum afterwards. “Maybe there’s some national worries about recession. We’re not concerned about that here.”

Westby attributed the Fargo market’s resilience to its diverse economy. Citing a recent study, he noted that Fargo’s economy ranked in the top 19% for diversification among similarly-sized cities. “That helps a tremendous amount because almost every industry is cyclical,” he said. “Fargo just continues to grow because we have a lot of different things adding to that economy.”

He added that Midwest residents also play a role in the economy’s ability to weather a storm. “I think we’re harder working, I think we stick it through when perhaps others might give up or perhaps not put the time and the energy into making their business a success. I think we see that in terms of the growth of our market,” Westby said.

Changes to living and working

Goldmark’s staff discussed a broad range of commercial real estate on Wednesday, covering land, office, industrial, retail and multi-family buildings, investment properties and agricultural real estate.

Paul Campbell, a commercial agent for Goldmark, said that the company is tracking “shadow vacancies” at local offices, instances where businesses own or rent large office spaces only to have few employees working inside. While some businesses may be looking to downsize their office holdings, others are committed to in-person work and are making investments to enhance their spaces for employees, Campbell said.

With the labor force at a premium, many of the changes in the office environment since the COVID-19 pandemic have been driven by employee desires. However, with a possible recession potentially leading to lay-offs, both Campbell and Westby predicted that power dynamics in the workplace could swing back in favor of employers.


At Goldmark’s Commercial Connect event, Paul Campbell spoke about the state of office real estate in the Fargo-Moorhead area. The event took place Wednesday, March 8, 2023 at the Delta by Marriott in Fargo.

Contributed / Nicole Scherweit

Westby expected that full work-from-home arrangements will continue to fall, thus leading to fewer shadow vacancies. As a result, he added that employers are likely to shrink their office footprint while adding modern improvements. “We’ll see some space given up, but we’ll also see some nice absorption in that nicer, newer product,” Westby said.

Currently, the strongest market is in the world of industrial real estate, agent Brett Saladin said. Industrial real estate stock is extremely low in the metro area, driving prices upward. The 104 industrial real estate transactions that took place in the last year totaled $80 million, Saladin said, a five-year high.

With very little stock available, builders have become more creative, embracing smaller shop condos. Shop condos accounted for 44 of the 104 sales, Saladin said. He suggested that further creativity may be required to meet demand, suggesting that property owners with excess space may opt to switch the use of their buildings to industrial purposes.


According to Goldmark agent Brett Saladin, industrial real estate is in high demand both locally and across the country. Saladin was among the presenters at the company’s Commercial Connect event, held Wednesday, March 8, 2023 at the Delta by Marriott in Fargo.

Contributed / Nicole Scherweit

According to the data presented, all indications are that living costs may continue to climb for residents.

Discussing land sales, Nate Vollmuth said that local residents and prospective home buyers can expect special assessments to continue to climb as more infrastructure will need funding.

Those living in apartments have likely noticed larger-than-usual rent increases over the past two years, Westby said. That increase can be attributed to inflation as well as falling apartment vacancy rates. As vacancy rates fell in recent years, apartment rental costs increased for tenants, he explained.

As for the potential that new apartments will continue to be constructed, Westby noted there are “contrasting factors” at play. A healthy real estate market coupled with investor demand to build more will motivate builders. However, virtually all construction inputs other than lumber have risen in price and interest rates have steadily risen, meaning Westby expected a “dampening effect” in apartment construction.

Among the common themes expressed at Wednesday’s event was the ramifications of the

Fargo-Moorhead Diversion

project. On the whole, the diversion is “hugely beneficial” for the metro area, providing flood protection and peace of mind for homeowners and businesses, Westby said.

Westby, who grew up in a farming family, said the diversion hasn’t been all good news for those who own agricultural land. Many land owners were required to cede portions of their land in favor of the diversion. “I have to look at it from both sides. From the commercial side, it has positive aspects to it in terms of driving demand and creating some certainty around development,” he said. “Unfortunately, a project of that size is not going to work for everybody.”


Aaron Hill of Goldmark Commercial Real Estate discusses the local retail real estate market Wednesday, March 8, 2023 at the Delta by Marriott in Fargo.

Contributed / Nicole Scherweit

Farmers who received compensation to allow the diversion project will be hotly competing to recoup their lost land holdings, Westby predicted. “Certainly we have to keep in mind the negative impacts from the farming community, because it has been significant for some of those folks,” he said.

Within the metro area, the diversion

will also put a cap on the amount of land available

for development. With that said, Westby said there are still thousands of acres to develop within the diversion boundaries which will last for several decades. “That will create a boundary of sorts for future development,” he said. “There will be a point where they hit that boundary if the growth continues down into the future.”

Overall, Westby expected that recession fears are unlikely to come to fruition locally. “Fargo, Moorhead, West Fargo, traditionally we are the little engine that could. We might not go up on the hockey stick, but we do not go over a cliff,” he told attendees. “We expect that to continue here.”



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