With its population growing — and more people expected to move to the city temporarily related to employment at F.E. Warren Air Force Base — Cheyenne is a promising multi-family housing market. Rents and costs of living are rising, and the city continues to grow at a steady clip — faster than two-thirds of all small cities in the U.S., in fact. This has led to an overall shortage of housing over the past several years.
Given the current dynamics, does it make sense to invest in multi-family commercial construction in Cheyenne now? Heck yeah! Here are four key reasons why Cheyenne is a great choice for multi-family investors.
Why Cheyenne for Commercial Construction?
Steady Population Growth
Cheyenne is flourishing. From 2016 to 2021, the Cheyenne metropolitan area has grown 3 percent, gaining nearly 3,000 residents and hitting a population of just over 100,000 (note that the metro population is larger than the population of Cheyenne itself, which currently sits at 65,051, according the to the U.S. Census Bureau). Within the “Small Metros” category, which includes regions with a total population of 350,000 or less, Cheyenne ranked 96 out of 168 metros that experienced population growth over the past five years.
While this may not seem like much, consider this: just down the I-25 interstate, the city of Boulder is the twelfth most populous city along the booming Front Range and home to the main campus of the University of Colorado, the state’s largest university. Boulder only experienced a 2.6 percent population increase over the same five-year span.
An Attractive Place to Do Business
As the Cowboy State’s largest city, Cheyenne continues to attract companies across many industries that want to expand or relocate to Wyoming. One company that recently announced a move to Cheyenne is UMC Technology Ltd., a fencing and wire machinery manufacturer that is opening its first North American facility. Like many other companies, UMC appreciates the independent, friendly, family-oriented culture of the city. The fact that since 2013, Wyoming has been ranked the “Most Business-Friendly Tax Climate” by the Tax Foundation doesn’t hurt either. Wyoming has no state corporate or individual income tax, no inventory tax, no sales tax on manufacturing equipment, no sales tax on electricity and gas used in the manufacturing process, no state or local gross receipts tax and low sales tax – a huge boon for businesses of all types.
Other notable business developments in Cheyenne in 2021 included expansion of the Microsoft data center and construction of a manufacturing facility for Eagle Claw Fishing Tackle.
Rising Property Values
In November 2022, the median listing price for a home in Cheyenne was $389,000, up more than 14 percent year-over-year and 31 percent since 2010. And according to the Commercial Real Estate Metro Market Report released by the National Association of Realtors, the first half of 2021 saw no multi-family units permitted for construction in Cheyenne, no sales transactions and an average vacancy rate of 1.5 percent — compared to a national average vacancy rate of 4.45 percent — pointing to the scarcity of multi-family units in the city.
In addition, in 2021, the average rent for a house in Cheyenne was $1,455, up 5.8 percent year-over-year and more than 35 percent since 2010. For two-bedroom apartments, the average rent was $924 in 2021, up 1.8 percent year-over-year and more than 32 percent since 2010.
The Promise of Future Demand
In addition to the city’s ongoing population growth, the modernization of F.E. Warren Air Force Base’s Ground Based Strategic Deterrent missile program will bring an influx of workers to Cheyenne in coming years. This is estimated to include about 250 to 350 new residents, and a total of 1,800 additional residents who will likely be needed to support the project, according to the Wyoming Center for Business and Economic Analysis: Economic Indicators for Greater Cheyenne, March 2022 Annual Trends Edition. How many rental units the city will need to meet demand depends on how fast the population grows.
To accommodate these new residents, according to the same study, commercial construction will need to produce at least 400 rental units by 2026 and 600 by 2030 if Cheyenne experiences slow growth, 600 units by 2026 and 800 units by 2030 if moderate growth is seen, and 800 units by 2026 and 1,000 units by 2030 if fast growth is seen.
Considering Multi-Family Investment?
Cheyenne’s market fundamentals are strong and do not appear likely to change soon, making the overall investment outlook for the multi-family market very positive. If your investment strategy includes multi-family commercial construction, working with experienced professionals can increase your chances of success while minimizing risk. Gateway Construction, LLC is an experienced commercial builder and ready to partner with you to achieve your goals. Contact us for more information about our commercial construction services by calling (307) 632-8950 or contact us online. Let’s start building your future today!