When Matt Gove was a kid, he went pheasant hunting on the outskirts of Rochester.

The place? What is now West Circle Drive, where commercial real estate has gone through the roof. Way back then, which is about 30 years ago, no one saw that surge coming, Gove said.

“I don’t think anybody would have jumped on that at the time,” said the licensed real estate salesperson with Realty Growth Inc. “Location is vitally important. But is it everything? I think that might be a trick question. I think it’s a big piece of the pie, an important piece.”

Gove and his colleagues Robert “Bucky” Beeman and Nick Pompeain discussed trends within commercial real estate in the Rochester market at present, and came away with these insights.

Q: What are the trends in commercial real estate right now?

Gove: There is still a lot of interest, a lot of hardworking, entrepreneurial spirits looking to start a business, get into a business or expand a business. Things have been difficult with rising interest rates to make these deals happen. Things have slowed down. But I’d preface that with there is still a lot of opportunity and great things happening, maybe just at a slower pace.

Beeman: We are seeing continued interest in West Circle Drive development. It seems like that’s been a trend for a couple of years.

Pompeian: We’re still getting transactions done. It’s just taking a bit more time. The rates are very volatile right now. It’s just taken a little more time to get transactions done and financed. There is still interest in the market, especially if you look at Rochester as a whole.

Q: Is location everything?

Gove: Location is very important. That said, I don’t think anybody has a crystal ball to tell the future.

Beeman: Location is a big portion, but with the right concepts and right operators people will go out of their way to try something that may be unique that they haven’t seen before. With the right location, it just increases the odds of a business owner’s success.

Pompeian: The focus is still on downtown and West Circle Drive. People want to be where people are. Then again, if you have something people want, they will find you. Location does help. It’s not everything but, yes, it does play a large role.

Q: What’s happening downtown?

Gove: Downtown is struggling, yet I think it’s gone through some troubling times, Covid being the biggest, and when you don’t have people it hurts every business. Downtown Rochester is a sleeping opportunity that will shine bright again. When and how, remains to be determined.


Beeman: I think we’re just going through a time where we have more vacancy downtown than I’ve seen in my lifetime. It’s hard to imagine changing spaces into something new.

Pompeian: There will be a resurgence. Everything is cyclical. This has happened time and time again, and something comes along to cause a renaissance. Ten years ago downtown was really hopping. It was lively. We will see a resurgence. It just takes time.

Q: What does the Rochester market have a lot of?

Pompeian: We have a lot of apartments, hotels, a lot of offices. Retail has had a pretty strong resurgence of retail industry following Covid. Are there vacancies? Yes, but not to the extent to what people were thinking. The pandemic really forced people to change the way they do business. I still feel there will be a need for an office of some sort. There will always be a need.

Beeman: Office space downtown. We also have a lot of banks and coffee shops.

Q: What is missing for commercial real estate in Rochester?

Pompeian: Rochester is an amazing city. What it’s missing is a loaded question and a difficult one to answer. We are missing entertainment options. Why don’t we have a national museum of health or medicine? I’ve wondered why we haven’t been able to get Broadway shows. And shopping, what about shopping? I always thought an REI or a Duluth Trading Co. would bring people back downtown. So would having a movie theater again. But if we truly want more entertainment, more restaurants, or whatever it is, we as a community need to support that.

Beeman: We are seeing a continued demand in what I’ll define as flexible space. This can be seen as a warehouse type of space, a unique thing as it can be used for many types of businesses from a contractor to a more active use such as a gymnastics studio. We lack in this area, and a lot of users have asked for that type of large, flexible, warehouse space. They want a blank shell.

Q: What type of businesses are coming into our market?

Beeman: We’re seeing a fair amount of restaurant inquiries. And a reasonable amount of interest from daycares and autism centers. We’re seeing pet concepts; there’s a need for those services.

Q: What didn’t we ask that is important to include:

Gove: It’s a tougher time but that doesn’t mean there isn’t opportunity and room for growth. It’s a little bit harder, you have to work a bit harder, look harder and be more patient. That’s the biggest take-away, maybe it’s a little tougher but there’s still opportunity and people who want to do things. The drive is still strong in the market of commercial real estate.

Pompeian: We’re in a very exciting time and Rochester has always been kind of insulated and in its own real estate bubble if you will. Interest and talk continues. I feel we are truly a resilient community and real estate here will be continually looked at and studied. There will be interest. I’m very optimistic. Despite rising rates, we’re remained fairly health real estate wise. I’m excited for the future. I’m excited for what’s to come.

If you would like to learn more about the Real Estate market please do not hesitate to reach out to the Realty Growth Inc team. You can find out more at or by calling 507-951-7130