- Real Estate
- Food & Drink
Dec. 27, 2020
I’ll guarantee you one thing about this column: It’s already longer than I planned, and it likely will be even more so by the time I’m done writing it.
I started with five storylines I was going to preview for you, but it wasn’t long before that had grown to seven, and then I made myself stop.
Clearly, I have no shortage of news to chase heading into 2021.
I looked back, and for 2020 we ran approximately 2,000 pieces of content on SiouxFalls.Business. I’m not sure I would have predicted many of them this time last year. But I’m going to do my best to see ahead anyway and give you a look at some of the stories I think might define the year ahead.
I probably could write an entire column just on this topic — and likely will some day. But with COVID-19 hopefully winding down this year, the stories that follow will look at its effects.
The pandemic already has proven an accelerator in many industries, so the question is how much will stick.
“I think the trends that started in 2020 — home deliveries, curbside pickup — are going to continue,” Nathan Sanderson, executive director of the South Dakota Retailers Association, told me.
“The drive toward a greater online presence by brick-and-mortar business is going to continue. We have a grocery store in Mobridge where you can order your food online, and that’s not something people would think about for a community in central South Dakota, so those are the kinds of things business owners are really looking to.”
In health care, I’ll be looking at virtual care and how that functions post-pandemic. It seems to represent a particular growth opportunity for Avera eCARE, which has an infrastructure unique in the field and hard to replicate. And I think we have to look at the mental health ramifications of living through the pandemic, which could be significant.
Then there are the impacts on how we work. Is remote work here to stay, does it take on a hybrid form, and what does that mean to the commercial real estate market in the office sector? Same with education, especially higher education. What does the pandemic do to that model — along with what students choose to study?
And there’s the warehousing and distribution industry to watch post-pandemic. Clearly we’ve seen an increase, topped off by Amazon, in warehousing and distribution in Sioux Falls. Will others follow if the on-demand economy is here to stay?
And then there are the sectors that felt the impact of the pandemic in an especially harsh way. I’ll be looking at how the tourism, restaurant and entertainment markets rebound, and sadly I know there will be businesses that are just hanging on and likely won’t be with us at some point in 2021. There is still fallout coming from the pandemic, and we’ll likely see some of it in the year ahead.
I always like alliteration, but this storyline is about more than businesses and people moving from Minnesota. Although, they definitely are moving from Minnesota, and it will be worth watching whether the state and local economic development marketing pushes in our neighboring state result in new business activity.
I’m amazed at how many people have picked up and moved — sometimes across the country — to South Dakota this year. Many of them are in Sioux Falls, so I’m interested to see how many follow. How many of the businesses that reached out for information, intrigued by the fact that South Dakota remained less restrictive during the pandemic, end up operating here? It’s definitely a storyline to watch.
“I think because of how we’ve handled it, we’re going to continue to see people migrate to South Dakota because they see there’s a great future in the state,” said Steve Westra, commissioner of the Governor’s Office of Economic Development.
Not long ago, I would have thought this would be “The post-merger era at Sanford Health,” which goes to show how fast a storyline can change. So instead, it’s the beginning of the Bill Gassen era at Sanford Health. I’ll be watching to see how the new CEO and his leadership team position the system both for growth in the Sioux Falls market and beyond.
While he has announced a leadership team, I still would expect Gassen to put a further personal stamp on it at some point. And I’ll be interested in what moves he and the team make internally and externally to define the Sanford experience and brand in new or adjusted ways. There’s a lot organizationally to be watching too: construction plans, research priorities, the focus for the system’s world clinics, development at the Sanford Sports Complex and, of course, whether any opportunities surface for the system to continue growing its footprint.
2020 was the year Chipotle Mexican Grill finally arrived in Sioux Falls. I fully expect 2021 will bring Chick-fil-A and potentially other sought-after names.
Sioux Falls, as long as all stays on track, will still see Dave & Buster’s come into the market. And I’m going to stick my neck out and say I think Dillard’s still comes too. I’ll also be watching what happens to the former Sears space once a seasonal lease is up. I think Empire Place will continue to fill in with national names in front of the mall and that you’ll see the momentum for east-side retail continue, potentially with a couple of national names on that side of town.
The grocery sector is particularly interesting to me in the year ahead, as it’s coming out of a very strong year and in theory has some ability to grow. Could this be the year we see a new national grocer enter the market? I’ll give it more than a 50 percent chance.
I don’t know how much of this story will get written in 2021, but parts of it should. By midyear, we’ll be showing you the completed Railyard Flats, the first mixed-use project on the former rail yard property downtown.
Lloyd Cos., redeveloper of the Sioux Steel site, also continues to work on its concept there after a pandemic-related delay. If there’s enough interest from office tenants — a good barometer for the immediate future of the office market in this community — we could see construction start in 2021.
I’m also hearing the city has received solid interest in its efforts to sell real estate involving some downtown parking lots and that there continues to be interest from developers in the remaining rail yard property.
If the stars align, maybe we’ll even have some activity with Cherapa II, the riverfront sequel to the Cherapa Place development that served as a catalyst for activity on the east side of downtown more than a decade ago.
And I do think you’ll see the look of the unfinished downtown parking ramp improved in the coming year, even if you don’t hear about any additional redevelopment there.
The real estate market has been a storyline for 2020 already, so it will be one to follow into the new year. I can’t remember a time with less inventory of single-family homes on the market — and some of that is tied directly to the influx of people moving here, as mentioned above. Multiple forces also have driven significant construction in multifamily housing, so this will be a year when you’ll see many updates on apartment construction.
All those factors also are combining to generate more interest and activity in the communities around Sioux Falls — which only is going to accelerate as major road projects provide more connectivity and people seek out housing outside of the city because of availability, cost, lifestyle or all of the above. Regionalization is far from a one-year storyline, and it likely will become a bigger one beyond 2021.
And finally, it can be tough to capture in one story but does reveal itself over multiple stories: the confidence factor. How confident do business leaders feel in the health of their business and the local and national economies? Enough to make capital investments? Ramp up hiring?
Same with individuals. Do you feel confident enough in your own situation and the community to invest in a new home, improve your current one, buy a vehicle, increase your discretionary spending?
So far, the answer to all of the above has, I think, been stronger than many might have expected given the global situation. But confidence is key, so it will be the underlying storyline across them all.
Congratulations on making it through 2020. Here’s to building on what went right for 2021.
The stories haven’t been written yet, but here’s a preview of what we think you’ll be reading in 2021 business news.