The Sioux Falls Commercial Real Estate Market

Shanti Ryle

August 1, 2025

A busy downtown street in Sioux Falls, South Dakota

Sioux Falls is South Dakota’s largest city, anchored by a thriving economy and high quality of life that continues to attract both residents and businesses. Strategically positioned at the intersection of Interstates 90 and 29 and set along the Big Sioux River, the city serves as a vital hub for commerce in the Upper Midwest.

The Sioux Falls MSA spans Lincoln, Minnehaha, McCook, and Turner counties in South Dakota’s southeastern corner, near the borders of Minnesota and Iowa. With a metro population of more than 300,000, the region continues to grow steadily, bolstered by a healthy job market, low cost of living, and business-friendly climate.

A diverse economic foundation spanning finance, healthcare, manufacturing, and retail keeps Sioux Falls resilient and forward-moving, even amid national headwinds. Consistently ranked among the best places to live and work in the U.S., the city’s momentum makes it a compelling location for commercial real estate investment. From office and industrial to multifamily and retail, activity across CRE asset classes reflects a balanced market with long-term upside.

Crexi proudly supports the Sioux Falls CRE community as the leading online platform for commercial real estate transactions. Our end-to-end technology empowers brokers, investors, and tenants with the tools they need to market, discover, and close deals more efficiently.

The river rapids flowing through the Sioux Falls city center

The State of Commercial Real Estate in Sioux Falls

With steady growth, a business-friendly environment, and a diverse local economy, Sioux Falls has earned its place as South Dakota’s commercial hub. The city continues to attract investors, developers, and businesses thanks to its strong fundamentals, affordable cost of living, and streamlined regulatory landscape. Key industries like healthcare, financial services, and logistics anchor the region’s economic stability, supported by major employers such as Sanford Health, Avera Health, and Smithfield Foods. And largely due to its strategic development approach, Sioux Falls is regularly named one of the best U.S. cities for small businesses.

This healthy economic mix has helped drive consistent population growth, and a strong labor force, competitive tax structure, and proactive city planning have also contributed to sustained demand across asset classes. In recent years, Sioux Falls has seen a noticeable uptick in development, particularly in mixed-use projects, medical facilities, and industrial spaces.

Whether it’s downtown office renovations, new multifamily developments, or industrial expansions near key transit corridors, the pace of activity signals confidence in the market’s long-term outlook. Sioux Falls offers the rare combination of stability, affordability, and opportunity - positioning it as a smart place to grow and invest.

Sioux Falls Regional Breakdown

As the fastest-growing region in the Midwest, the Sioux Falls metro area continues to draw new residents with its strong economy, affordable lifestyle, and quality of life that lives up to its nickname - “The Best Little City in America.” With more than 206,000 people living in the city and nearly 305,000 across the metro, Sioux Falls is growing steadily while retaining its welcoming, small-city feel. That mix of opportunity and livability has made it especially appealing to young professionals, families, and remote workers alike.

Both Minnehaha and Lincoln Counties are seeing consistent growth as well, offering a range of residential options from suburban neighborhoods to rural acreage, all within easy reach of Sioux Falls’ business hubs and popular local highlights. The region's young median age, competitive incomes, and steady growth reflect a market with strong long-term fundamentals and plenty of runway for continued expansion.

Sioux Falls is home to over 206,000 people and nearly 305,000 in the metropolitan area.
Minnehaha County has a population of over 210,000, while Lincoln County is home to more than 75,000.
The Sioux Falls MTA is the fastest-growing region in the Midwest, seeing a population increase of nearly 8% since 2020 alone.
The median age in the metro area is 36.5, a little less than the figure across the state.
Per capita income is $46,167, and median household income is $70,925.

The city and parks of Sioux Falls, SD at night

Sioux Falls Job Market

Sioux Falls has built a remarkably resilient and future-forward job market, supported by a strong foundation in healthcare, finance, and advanced manufacturing. The city’s strategic investments in infrastructure, education, and industry partnerships continue to attract major employers and support a diverse, skilled workforce.

Economic momentum is visible across sectors - from logistics and life sciences to construction and technology - fueling both private investment and commercial development. New projects like the Black Hills Industrial Center, Dakota Market Square, and Liberty Plaza reflect confidence in the city’s long-term economic trajectory. Add in a low cost of doing business and a highly educated labor force, and it’s clear why Sioux Falls consistently earns national recognition for job growth and economic performance.

GDP has soared by about 53% over the past two decades, currently estimated at just over $23 billion.
The unemployment rate is 1.7% as of July 2025, significantly lower than the national unemployment rate of 4.1%.
Sioux Falls ranks number one among the U.S. metropolitan areas with the lowest unemployment rates.
Major employers include Sanford Health, Avera Health, Sioux Falls School District, Smithfield Foods, Wells Fargo, Amazon, and the Department of Veterans Affairs Medical & Regional Office.
Distribution and logistics, advanced manufacturing, and health and life sciences are among the key industries in Sioux Falls.
The Tax Foundation ranks South Dakota as having the 2nd best state business tax climate in the United States.
Metro Sioux Falls is home to Augustana University, the University of Sioux Falls, and Southeast Technical College.
About 93% of the population are high school graduates, and over 40% hold a bachelor’s degree or postgraduate degree.
The Sioux Falls metro area boasts a well-connected transportation infrastructure, featuring Interstate 29 and Interstate 90, access to Class 1 rail, Sioux Falls Regional Airport (FSD), and a public transit system.

Office buildings stand adjacent to Sioux Falls' main river

Sioux Falls Industrial Market

Sioux Falls’ industrial market remains tight, with vacancies well below the national average and steady demand from expanding businesses. While new deliveries have been limited, leasing activity and absorption continue to reflect a healthy appetite for functional industrial space. With much of the existing inventory spoken for, owner-users are likely turning to build-to-suit opportunities to meet their needs.

Market overview (NAR Commercial Metro Market Reports Q3 2024)

Inventory: 19,010,603 SF
Vacancy rate: 2.2%
Net absorption (12 month): 154,594 SF
Deliveries (12 months): 6,050 SF

Crexi Insights

These are the most recent industrial lease and sales trends from Crexi Insights (as of July 2025):

For Lease (active)

Asking rate/SqFt (median): $8 per year
Median SqFt/listing: 6,084
Days on market: 99
Total listings on Crexi: 92 spaces

For Sale (active)

Median asking price: $2.2 million
Price/SqFt: $111
Asking cap rate: 13.9%
Days on market: 113
Total listings on Crexi: 24

Sales Comps (past 12 months)

Median sold price: $325,000
Sold price/SqFt: $28
Total sales volume: $5.3 million
Median SqFt sold/transaction: 13,500
Total SqFt sold: 102,500
Days on market (median): 76

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The inside of a retail grocer in Sioux Falls

Sioux Falls Office Market

Sioux Falls continues to see steady demand for office space, with vacancy rates remaining well below the national average. Absorption has outpaced new deliveries over the past year, signaling that businesses are still actively expanding or relocating within the market. This ongoing activity reflects the city's overall economic stability and appeal as a regional business hub.

Market overview (NAR Commercial Metro Market Reports Q3 2024)

Inventory: 11,652,040 SF
Vacancy rate: 4.9%
Net absorption (12 month): 129,668 SF
Deliveries (12 months): 10,000 SF

Crexi Insights

For a detailed overview of the Sioux Falls office market as of July 2025, rely on Crexi Insights. Access the latest transactions, leasing trends, and growth statistics in the commercial real estate sector.

For Lease (active)

Asking rate/SqFt (median): $16 per year
Median SqFt/listing: 2,254 SF
Days on market: 173
Total listings on Crexi: 301 spaces

For Sale (active)

Median asking price: $1.6 million
Price/SqFt: $145
Asking cap rate: 6.7%
Days on market: 256
Total listings on Crexi: 47

Sales Comps (past 12 months)

Median sold price: $317,500
Sold price/SqFt: $140
Total sales volume: $3.2 million
Median SqFt sold/transaction: 2,203 SF
Days on market (median): 415

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The river that rolls through Sioux Falls is surrounded by open, green park space

Sioux Falls Retail Market

Retail demand in Sioux Falls is staying strong, with vacancy rates holding well below the national average. Steady absorption over the past year highlights the market’s stability, even as rent growth remains moderate. With a healthy balance of supply and demand, the city’s retail landscape continues to support both local businesses and national brands.

Market overview (NAR Commercial Metro Market Reports Q3 2024)

Inventory: 15,760,496 SF
Vacancy rate: 1.9%
Net absorption (12 month): 149,348 SF

Crexi Insights

Retail lease and sales trends from Crexi Insights (as of July 2025):

For Lease (active)

Asking rate/SqFt (median): $18 per year
Median SqFt/listing: 2,192 SF
Days on market: 229
Total listings on Crexi: 178 spaces

For Sale (active)

Median asking price: $1.2 million
Price/SqFt: $264
Asking cap rate: 6.5%
Days on market: 285
Total listings on Crexi: 39

Sales Comps (past 12 months)

Median sold price: $557,500
Sold price/SqFt: $158
Total sales volume: $17.9 million
Sold cap rate: 6.5%
Median SqFt sold/transaction: 2,400 SF
Days on market (median): 128

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Sioux Falls Multifamily Market

Sioux Falls’ multifamily market continues to show steady demand, with absorption outpacing new deliveries over the past year. While effective rents remain relatively affordable, vacancy rates are higher than average, partly reflecting the lease-up phase of recently completed projects. As the market works through this new inventory - and new multifamily projects move forward - rental activity is expected to remain active across the metro.