One of the market's main worries right now is the large amount of space -- 1.3 million sf – available for sublease. That accounts for about 19% of all the available vacant space. That's due to companies cutting back on space requirements, as wellas postponing expansion plans. Most of that -- 943,000 sf -- is in the suburbs, and most of that in Class A properties; about 382,000 sf is available for sublease in the Downtown areas.
While the downtown markets came in at 6.9%, the suburban markets hit 12.7%, according to the report. That's despite the fact the suburban office market accounted for most of the absorption, which was up slightly from the fourth quarter's absorption. Of the 224,573 sf of office space absorbed in the first quarter, 214,729 sf was absorbed in the suburban markets while just 9,844 sf was absorbed in the Downtown markets, according to Grubb & Ellis.
The northeast suburbs were by far the most active in absorbing space, accounting for 251,477 sf.
About 5 million sf of new office space is under construction in the Twin Cities market, with about 2 million square feet of that "speculative multi-tenant'' space, says Joe Hollman, researchmanager for Grubb & Ellis.
Rental rates were generally flat, with Class A rates rising about 30 cents per sf to $27.03 per sf, and Class B rates rising 4 cents per sf to $21.33 per sf.
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