US Market Update

Posted by Dave Farley
August 20th, 2013

A few comments, suggestions, and ideas that may be of interest…

A few years back, I wrote about the market conditions and opportunity for members to sell into the state of Montana. The potential at that time was limited as Montana was hit hard during the collapse of the real estate market and residential construction ground to a near complete halt. Last week, I had the opportunity to revisit the market and was surprised by decent level of construction activity, both in the residential and light commercial sectors.

I started my trip in Bozeman, which is the third largest city in the state behind Billings and Missoula and is home to Montana State University. Bozeman is also the gateway the States major tourist sector with Yellowstone Park and the resort market of Big Sky within an hours’ drive of the airport.

Big Sky is abuzz in construction with over 200 medium and high-end residential builds currently under works. Most of the construction is taking place in the exclusive gated communities of Moonlight Basin, Spanish Peaks, and the ultra exclusive Yellowstone Club. All three emerged from bankruptcy protection last year and have new ownership, with Yellowstone Club now under the direction of Discovery Land Corp who own and manage a number of exclusive resort communities across the United States.

In speaking with both builders and architects working in Big Sky, a noticeable trend occurred; all were extremely busy and had projects on the books for the next 12 to 18 months. One prominent architectural firm that I spoke to suggested that in Yellowstone club alone, a projected $150 million dollars of construction activity is expected over the next 18 to 24 months. That is a significant number, but it helps that Yellowstone Club counts the wealthiest man in the world, Bill Gates as one of its members.

(Image below: Yellowstone Club Gate)

The look and design of architecture in the Big Sky region is quite similar to Whistler with large mountain style homes that showcase an extensive use of heavy timber and western red cedar on both exterior and interior applications. The opportunity for members depends on the products that you manufacture and how they are distributed. For timber framers and log home manufacturers, there are a couple dozen builders and architects in the market who specialize in resort design and construction. For example, Locati Architects,www.locatiarchitects.com, is one of the key firms in the Bozeman and Big Sky markets and a firm worth getting to know (image of their design is below). Residential builder and general contractor, Langlas & Associates,  www.langlas.com, is a firm that specializes in both residential and light commercial construction across the state and has a considerable amount of work in the Big Sky region.

In building product supply and distribution, the two firms that seem to be doing the lions’ share of business in the region are Simkin Hallins and Kenyon Noble. I saw truck after truck packed full of dimension lumber and building supplies travelling up the freeway from Bozeman heading to Big Sky.

In my opinion, the market opportunity and potential in the region is strong and with the recent merger of the two ski resorts announced last week is only going to get stronger. The merger makes Big Sky on par with Whistler and Vail as being the largest three ski resorts in North America.

One of the best ways to take advantage of this market will be to participate with BC Wood and members in the Billings Builder and Home show in February in Billings, Montana. Billings itself is busy with construction in the multi-family market. I will discuss that market in the next newsletter.

As always, for more information on Montana and the Big Sky region, please feel free to contact me at dfarley@bcwood.com

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