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February 2012 Market Update « CGC Commercial
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February 2012 Market Update

by Chris Garcia, 5:16 PM on February 1st, 2012, No Comments

The overall market is improving steadily, and will continue to do so.  Absorption is expected to be over 800,000 SF for 2012.  United Health Group continues to acquire property while St Jude and Target are gearing up for large expansions with Target building 700,000 SF in Brooklyn Park.

Here is a brief overview of the Twin Cities office and
industrial market:

Office

  • 484,000 square feet of positive absorption for 2011
  • Vacancy rate fell to 19.2%
  • Vacancy rate fell for the first time since 2006
  • Vacancy among class A properties is at 14.9%
  • 656,000 sf of positive absorption recorded for class A
    properties
  • Minneapolis CBD showed 116,000 sf of positive absorption showing
    positive absorption for the second consecutive year
  • Minneapolis CBD fell to 18%

Market rates were flat in 2011 and 2012 should see an increase.  Market-wide rates are $23 per square foot gross, versus $22.50 psf at year-end 2010.  There have been no new office buildings since 2009.

Industrial

The industrial market is showing a 17% vacancy rate at this point.  Leasing activity was decent for
2011 with 600,000 square feet of positive absorption. Rental rates are also flat and average net rates are currently at $4.25 and $8.00.

There are no new multi-tenant projects under way in the Twin Cities however there are some build to suits. The BTS include a 300,000 SF building for Medline, 580,000 SF building
for Sanmar, and a 100,000 SF building for Tri-Star.

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