Here are the major retailers opening new locations in Minneapolis this year: Popeyes, Trader Joe’s, Whole Foods and Goodwill.
It’s a strong list, and it speaks to the strength of the Minneapolis commercial real estate market in general: Minneapolis is one of the strongest markets in the Midwest, and retailers understand this.
That’s the message from from Marcus & Millichap Real Estate Investment Services, which took a close look at the Minneapolis retail market in a 2013 second-quarter report on this important commercial sector.
Highlights? First, there’s chicken fast-food company Popeyes. The company moved into the Minneapolis area in 2012 by purchasing 13 former KFC locations. The chain recently opened its first converted restaurant in the metro area this year, and plans to have all of its new Minneapolis-area sites open by the end of this summer.
Specialty grocer Trader Joe’s will also make an impact in the Minneapolis area. The grocer will soon complete a new store in Shoreview, Minn. At the same time, Whole Foods, another specialty grocer, will open in the 222 Hennepin Apartments building in downtown Minneapolis. A third grocer, Lakewinds Natural Foods plans to open a 20,000-square-foot location in the Lyndale Gardens redevelopment in Minneapolis later this year.
Finally, Jerry’s Enterprises plans to build its own 68,000-square-foot grocery story in Woodbury, Minn. A pair of new Wal-Mart Supercenters in the region will add to the grocery mix.
The real positive in the Minneapolis area? According to Marcus & Millichap, demand for retail properties is outpacing the supply. This helps explain why developers in the area will add 1.1 million square feet of retail space in 2013. Vacancy rates in the retail sector are expected to fall this year, too, with Marcus & Millichap predicting that job growth and a growing population base will cause retail vacancy rates to fall by 110 basis points to 8.3 percent. That’s a slight improvement from 2012, when vacancy fell by 70 basis points.
Rents, too, should rise, good news for landlords. According to Marcus & Millichap, shopping center rents should rise by 2 percent in 2013, jumping to $13.73 a square foot.
