Anyone working in the commercial real estate business in Minneapolis/St. Paul knows that the region’s multi-family sector is thriving today. Now a new report from Marcus & Millichap Real Estate Investment Services says that the Twin Cities’ multi-family market isn’t just performing well, it actually ranks as one of the strongest in the nation.
Part of this is because the Twin Cities is seeing new jobs created on a large scale. Marcus & Millichap says that employers in the region are expected to create 28,000 jobs in 2012, with several of these jobs being offered by the area’s Fortune 500 firms. Marcus specifically points to Target, which is expanding by leasing 189,000 square feet in downtown Minneapolis and has also said it will move 3,900 technology workers to its north campus. This last move will increase the workforce at Target’s Brooklyn Park, Minn., campus to 5,200 by 2014.
Thanks in part to the Twin Cities’ positive hiring forecasts, builders are expected to deliver nearly 1,870 new apartment units to the metro area in 2012. That’s up significantly from the 477 units that builders delivered in 2011.
This increase in supply will boost vacancy rates up 40 basis points in 2012. Even so, the multi-family vacancy rate in the Twin Cities will remain a solid 2.9 percent this year.
Landlords should be happy to learn that Marcus & Millichap predicts that asking rents for the Twin Cities’ multi-family market should rise 2.7 percent to $984 a month in 2012, while effective rents are expected to rise 3.1 percent to $934 a month.
