MINNEAPOLIS—Tenants in the Minneapolis metro region are eager to soak up available industrial space. Landlords that control class A space are doing especially well, and an increasing number have filled up their newest buildings. Liberty Property Trust signed three lease agreements totaling 327,124 square feet in the fourth quarter of 2016, including two that brought its Dayton Distribution Center I to 92% occupancy.

“The Minneapolis Metro saw strong activity throughout the second half of last year,” says Neal Driscoll, vice president, market officer. “With vacancy rates at an all-time low in the area, having quality product available is a major advantage.”

At Dayton Distribution Center I, located at 11020 Holly Ln. North in northwest suburban Dayton, Spears Manufacturing Co. will occupy 142,680 square feet and King Solutions, Inc. will relocate into 84,837 square feet of space. Both companies will occupy the spaces this spring. Completed in 2015, the 247,004 square foot class A industrial building offers 32' clear heights and easy access to I-94.

In addition, Graco Inc. will expand into 99,607 square feet at 13220 Wilfred Ln. North in Diamond Lake Distribution Center this spring following the relocation of King Solutions. Built in 2014, this building offers a total of 227,054 square feet and also features 32' clear heights.

The vacancy rate in the region's industrial market stood at just 6.9% at the end of the year, a low not seen in more than a decade, according to Colliers International. This rate is down from 7.1% during the third quarter. There was 377,640 square feet of absorption, bringing the 2016 total to 2,632,291 square feet. “This is lower than 2015's peak of 2,958,812 square feet, but well above the 10-year average of just over 1 million square feet,” says Colliers.

Liberty has been busy in other vibrant industrial submarkets. As reported in GlobeSt.com, it recently broke ground on its second industrial building in Chicago's O'Hare Airport submarket. These infill projects have replaced antiquated structures with facilities suitable for modern logistics users. The vacancy rate around the airport recently sank to around 4%, the lowest it has been since 2000.

“This is an exciting time to be in industrial real estate in the Midwest,” says Driscoll. “New buildings that offer higher clear heights and easy access to major highways are especially desirable. Coupled with a strong workforce, these high quality available properties make cities such as Minneapolis very attractive to companies looking to grow.”

Instant Insights /

Minneapolis Metro Seeing Strong Activity

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