Cushman & Wakefield/NorthMarq: Twin Cities Market Recovers

   MINNEAPOLIS – The Twin Cities commercial real estate market continues to recover and rebound, according to Cushman & Wakefield/NorthMarq.

   The latest Compass Report analyzing the Minneapolis-St. Paul commercial real estate scene shows there is increased occupancy in all areas of the market. Vacancy fell to 13.02% marketwide and this was accompanied by 3.1 million square feet of positive absorption, the report says.    “There were a number of very positive changes in the Twin Cities commercial real estate market, most notably in the industrial and office markets,”   Mike Ohmes, C&W/NorthMarq executive vice president, says in a release. “After a slow first half, development and re-development activity have bounced back, nearly doubling the square footage under construction since 2011.”    The Twin Cities industrial market in the last half of 2012 saw its lowest vacancy rate since 2008, dropping 3.3% from a year ago to 12.8%. Year-end absorption totaled 2,512,348 SF, the biggest amount since pre-recession 2005.    The office market saw almost 1 million SF of positive absorption in 2012, putting it the best shape since 2007. Overall vacancy fell 1.2% to 18% for direct space across all property types, compared to a year ago.     The retail market showed the strongest year of retail activity since the recession, with vacancy falling to 8.3% from 8.9% at mid-year due to 802,000 SF of positive absorption in the second half.    The report adds that the Twin Cities continue to be a draw for large, institutional investors, which makes the area a key secondary commercial real estate market.    “Despite a lingering sense of economic uncertainty, all sectors of the Twin Cities commercial real estate market continue to show signs of recovery,” Ohmes says. “The office and industrial markets are poised for accelerated growth. Once the economic uncertainty dissipates, select development projects offer optimism for retail, industrial and multi-family sectors.”    The full Compass Report can be seen at  www.northmarqcompass.com