Whitney Peyton, senior managing director in the Minneapolis office of CB Richard Ellis, recently spoke with Midwest Real Estate News about the health of the commercial real estate market in Minneapolis. Here’s some of what he had to say.
Midwest Real Estate News: How has the commercial real estate market in Minneapolis been faring as 2011 gets underway? Whitney Peyton: The business has in fact been improving. We have seen improvement in both the office and the industrial markets. The retail markets, of course, are still lagging a bit. But that’s not unusual across the country. We’ve had some good major industrial leases. And we’ve had some good major office leases recently.
MWREN: How are the numbers looking? Peyton: Some of the leases we’ve seen have moved the vacancy needle a little bit in the appropriate direction. We are starting to see less vacancy and more occupancy. Real rental rates are holding their own in office and in industrial. Of course, we have seen that rates have fallen a bit in retail.
MWREN: Why do you think the Minneapolis/St. Paul region has done as well as it has during these down economic times? Peyton: The area’s diversified economy, I think, is the number-one reason. We are fortunate in that a lot of businesses in different segments of the economy are located here. Unemployment tends to be lower in Minneapolis/St. Paul than it is on the national level. Again, it comes down to the fact that we are diversified and that we have several large private companies in the Twin Cities. And, of course, we have everything that feeds off of those larger companies.
MWREN: I know you don’t own a crystal ball, but what do you see here as 2011 progresses? Peyton: The market is improving overall as confidence is restored in the economy. I think the companies that are out there have delayed making decisions for a fair amount of time. They are now in the position where they need to make a decision. That may include the decision to grow their businesses and employ new people.