The second phase of this 340-unit property in Williston, North Dakota is the brainchild of Tribeca Properties Development, a new firm built especially for the small town apartment demand. Courtesy of Tribeca Proeprties
The Bakken Shale phenomena, and its effect on North Dakota's suddenly exorbitant rent prices, is a case study in boomtown demand.
The shale formation that sits below Williston, North Dakota is one of only seven major shale plays across the nation, and large energy companies are settling into these regions to tap into the resource, with gusto. Employment numbers have been driven up so high in regions like Williston that it's regarded as a modern day gold rush, pushing apartment demand to new heights in the process.
“Williston right now is like remodeling your kitchen; it's pretty stressful,” says Shawn Wenko, assistant director for the Williston Economic Development department. “You’re doing your dishes in the bathtub, and you’re cooking on a hot plate. It’s not the most ideal situation. But with the development happening, were going to have a pretty nice kitchen when it’s all said and done.”
Williston is the fastest growing micropolitan in the nation, but before the gold rush, the area had only modest infrastructure. Now, a record amount of housing is going up with thousands of units coming online this year.
And yet, this is nothing new to the denizens of Williston. The small town has had an oil industry presence since the 1950s, and has lived through several boom and bust cycles. But this latest boom is bigger, and seems like it has longer-term implications.The resulting investments in infrastructure and housing bode well for the region's economic growth in other industries.
“What’s different this time around is this play is really technology-driven,” Wenko says. “Oil and gas grew in 2013, but 10 other industries grew as well, even more than this industry. It shows that we’re starting to build sustainability here and some diversification.”
Energy companies have made large investments in long-term shale production, showing Wenko and local multifamily firms that the growing energy industry in Williston will be around for some time.
“One thing that’s been determined is that the shale play, it’s going to be a 20-year process to take the resource out of the ground,” says Gary Bethel, principal with the San Antonio, Tx.-based Beach Project Management. “They have to establish locations in a lot of these areas from scratch.”
Last year was the year of restaurants–about 13 new eateries came online in the small town within the last 18 months. The town also expects several bigger name retailers to open stores this year. Another indication the region is settling in for the long haul is a shift to single-family home production. Families are settling in on the area, proving the prospect of long-term growth.
But back in 2010, Clint Wilson, president of locally-based builder Tribeca Properties Development, wasn't sure single-family housing would abound in the region, at least not right away.
“We intended to do single-family homes. That was part of our pro forma,” Wilson says. “But finding people that qualified to purchase a home was difficult. So it [left] more demand for multifamily.”
He was approached by an oil company to build apartments in North Dakota three years ago, and jumped at the opportunity. Wilson decided to stay in North Dakota and become an owner as well as a developer, which gave birth to Tribeca Properties. Now, the company is slated to unveil an 81-unit property this year, and begin a second phase with 340 units. His group also opened a hotel last year.
Still, Wilson has no designs on geographic expansion: the company will remain smaller, solely focused on the local market.
“We’re going to stick to the strategy,” Wilson says.
-Linsey Isaacs is an assistant editor with Multifamily Executive magazine. Follow her on twitter @LinseyI to continue this conversation.