West Suburbs Enjoy Record Year for Office Development and Lease-up

MINNEAPOLIS-Despite nearly one million sf of new construction, the western suburbs of the Twin Cities saw barely a blip in their vacancy rates last year. According to a report from United Properties, the market absorbed more space in 2000 than it had sopped up in the previous six years combined.

The vacancy rate in the market ended the year at 9.9%, about the same as the previous year. If sublease space is added back, the vacancy rate would be 11.1%, according to the Bloomington, MN-based commercial real estate firm. United expects vacancy rates to stay in the 8% to 9% range as long as demand does not dip well below its expected 250,000 sf to 300,000 sf of absorption.

While developers added 955,430 sf to the West submarket, tenants soaked up 842,358 sf. Also, for the first time, the market has more class A space than class B space, and much of the leasing was done in those class A buildings.