Cushman & Wakefield/NorthMarq recently brought some good news to commercial real estate professionals in the Twin Cities. According to the company’s most recent semi-annual Compass Report, commercial real estate vacancies across the Minneapolis/St. Paul area have dropped to 13.02 percent thanks in part to 3.1 million square feet of positive absorption.
“There were a number of very positive changes in the Twin Cities commercial real estate market, most notably in the industrial and office markets,” said Mike Ohmes, executive vice president with Cushman & Wakefield/NorthMarq, in a written statement. “After a slow first half, development and re-development activity have bounced back, nearly doubling the square footage under construction since 2011.”
The latest Compass Report studied commercial real estate transactions in the last six months of 2012 in the Twin Cities region.
The report found that the area’s industrial posted its lowest vacancy rate since 2008, dropping to 12.8 percent, a 3.3 percent drop from 2011. Year-end absorption hit more than 2.5 million square feet, the most since 2005.
The news was positive for the office market, too, which posted nearly 1 million square feet of positive absorption for the year. This is the healthiest this market has been since 2007. Overall, vacancy stood at 18 percent for all office property types, down 1.2 percent from a year earlier.
The Twin Cities’ retail market also showed its strongest year of activity since the recesion, with vacancy rates falling from 8.9 percent in the middle of the year to 8.3 percent at the end.
And, of course, multi-family was especially strong, with more than 1,400 new apartment units delivered in the Twin Cities area in 2012. Even with these new units, vacancy in this sector rose just a bit, climbing from 2.3 percent to 2.7 percent in 2012.
The takeaway? The Twin Cities remains one of the strongest commercial real estate markets in the Midwest.
— Dan Rafter
