Warning: Creating default object from empty value in /nfs/c06/h02/mnt/87599/domains/cgccommercial.com/html/wp-content/plugins/cleaner-gallery/cleaner-gallery.php on line 84
Northmarq Compass Market Report July 2011- Summary « CGC Commercial
Warning: Missing argument 2 for wpdb::prepare(), called in /nfs/c06/h02/mnt/87599/domains/cgccommercial.com/html/wp-content/plugins/post-types-order/post-types-order.php on line 190 and defined in /nfs/c06/h02/mnt/87599/domains/cgccommercial.com/html/wp-includes/wp-db.php on line 1198

Warning: Missing argument 2 for wpdb::prepare(), called in /nfs/c06/h02/mnt/87599/domains/cgccommercial.com/html/wp-content/plugins/post-types-order/post-types-order.php on line 265 and defined in /nfs/c06/h02/mnt/87599/domains/cgccommercial.com/html/wp-includes/wp-db.php on line 1198
blog

Northmarq Compass Market Report July 2011- Summary

by Chris Garcia, 7:33 PM on July 27th, 2011, No Comments

On July 26, 2011 Northmarq’s Minneapolis office released their market report.   The report discusses office, industrial, retail, investment, multi family, and now hotels.  We focused only on Office, Industrial, and Investment Properties.  Here is the summary:

Office

The viewpoint from the report is bullish, especially when you consider that the vacancy rate is high by any standard at 19.2%.  That is 7 percentage points off the 2001 level of 12%.  The absorption for the first half of 2011 was 324K SF.  All of that absorption can be attributed to Class A leasing.  Class A leased over 500K SF alone.

They predict an additional 950,000 SF of absorption for the 2nd half of 2011 which would equate to over 1.25M SF of positive absorption for all of 2011.  That would be a great year.  Here is the summary:

  • No new office buildings under construction at this point
  • Mpls CBD is healthy for Class A office at 10-5% vacant
  • 500,000 SF of leases are signed and not included in their numbers
  • Class B and C are extremely competitive for Tenants.  Both posted negative absorption thus far in 2011
  • Class A posted 500,000 SF of positive absorption alone in 1st half

Industiral

The outlook for industrial is generally positive.  With 500K SF of positive absorption and a prediction of another 500K SF for the 2nd half, the feeling is that the market is turning the corner.  The northwest lead the way in activity as it did in the last recession with some large deals including Great Northern (100K SF), General Mills (65SF), Medline (300K SF),  and ATK (300K SF).  885,000 SF total was completed in the northwest alone.

  • 540,000 SF positive absorption for 1st half
  • 16.9% vacancy rate
  • Large Users in the market including RR Donnely (300K SF), Sanmar (500K SF), FedEx (100K SF)
  • Bulk Warehouse is at 14% vacancy, close to being a healthy rate
  • Rates predicted to tighten in 2012
  • New construction is not mentioned

Investment

More investors are looking at the Twin Cities as a good place to own real estate.  Cap rates are moving downward as the market becomes healthier and liquidity is starting to return.

  • More institutions have focused on the TC Metro area
  • The properties of choice are Class A office, Bulk Warehouse, Grocery Anchored Retail
  • Mpls CBD gets a 100 basis point premium over suburbs 7-8 Cap
  • CMBS market is on the rebound which is helping liquidity
  • Cap Rates are 6.6 for Multi-Family, 8.2 for Retail, 8.6 Industrial, and 8.3 Office

Check out the full report at http://bit.ly/pv7wJR.

Leave a Reply


Warning: Missing argument 2 for wpdb::prepare(), called in /nfs/c06/h02/mnt/87599/domains/cgccommercial.com/html/wp-content/plugins/post-types-order/post-types-order.php on line 190 and defined in /nfs/c06/h02/mnt/87599/domains/cgccommercial.com/html/wp-includes/wp-db.php on line 1198
«
Warning: Missing argument 2 for wpdb::prepare(), called in /nfs/c06/h02/mnt/87599/domains/cgccommercial.com/html/wp-content/plugins/post-types-order/post-types-order.php on line 265 and defined in /nfs/c06/h02/mnt/87599/domains/cgccommercial.com/html/wp-includes/wp-db.php on line 1198
»