Calculate cap rates and net operating income for commercial properties in South Dakota. Compare your results against South Dakota's tertiary market benchmarks sourced from CBRE H2 2025.
South Dakota benefits from having no state income tax and no state corporate income tax, attracting credit card company operations (Citibank, Wells Fargo card operations in Sioux Falls) and trust company domiciles. Sioux Falls is the largest and most active CRE market. Agriculture and healthcare are the dominant economic drivers. Tourism around Mount Rushmore supports Rapid City retail and hospitality.
| Property Type | Typical Low % | Typical High % |
|---|---|---|
| Multifamily | 6.5% | 8.5% |
| Industrial | 7.0% | 9.0% |
| Retail | 7.0% | 9.0% |
| Office | 7.5% | 10.0% |
Benchmarks sourced from CBRE H2 2025 Cap Rate Survey, JP Morgan, Matthews, and Cushman & Wakefield market data. Ranges represent typical stabilized assets — actual rates vary by asset quality, location, and market conditions.
South Dakota cap rates range from 6.5–8.5% for multifamily, 7.0–9.0% for industrial and retail, and 7.5–10.0% for office. Sioux Falls has the most competitive rates driven by financial services and healthcare concentration.
South Dakota's favorable banking laws (no usury limits on interest rates, adopted in 1981) attracted Citibank's credit card operations to Sioux Falls, which subsequently became a hub for credit card and financial services companies. This has created stable office and data center demand well above what the city's population would otherwise support.
South Dakota's CRE is driven by financial services (Sioux Falls), healthcare systems (Sanford Health, Avera Health, both headquartered in Sioux Falls), agriculture and food processing, and Mount Rushmore/Badlands tourism. The state's no-income-tax advantage has attracted some corporate relocations and trust domiciles, creating niche demand.
This tool is for informational and educational reference only and does not constitute real estate investment advice. Cap rate benchmarks are estimates based on published industry surveys and may not reflect current conditions in your specific market, submarket, or asset class. Actual cap rates vary significantly based on property condition, location, tenant quality, lease terms, and local market dynamics. Always consult a licensed commercial real estate broker, appraiser, or investment advisor before making real estate investment decisions.