X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

MINNEAPOLIS-The Twin Cities’ industrial real estate market felt the pinch from the economic slowdown in the first half, especially in the tech sector, according to a recentcommercial real estate survey by United Properties. Market activity slowed to a lukewarm pace, with growth in the medical-tech industry helping offset lower demand in other industries, according to a mid-year report from the Bloomington, MN-based commercial real estate company.

The marketwide vacancy rate rose a point to 11.4%. Sublease space — up 50% since January — remains a significant competitive factor in many of the submarkets and pushes the overall vacancy rate to 14.2%.

The market, which totals 82 million sf, showed a negative absorption of 635,760 sf over the first six months. By type of space, that sorted out to a positive 80,786 sf for bulk warehouse, a negative 437,274 sf for office showroom and a negative 279,272 sf for office warehouse, according to the United survey.

Activity in the Northeast submarket was strong enough to show positive absorption of almost 100,000 sf in spite of 421,000 sf of new construction coming on line. Owners of office showroom properties are aggressively pursuing more tenants more oriented toleasing office space that showroom space.

Demand was slowest in the tech-heavy Southwest submarket, where vacancies rose almost 3 percentage points. Rental rates softened slightly. A negative absorption of 401,000 sf was due primarily to the addition of new space coming on line at the end of2000 and the first part of 2001. Major space users such as ADC Telecommunications slowed or stopped growing during the first half of the year.

The closing of e-commerce company ClickShip, a unit of Provell (formerly Damark), brought 250,000 square feet of sublease space to the Northwest submarket. In the Southeast submarket, more than 600,000 sf of sublease space is available.

Even so, rental rates are holding steady. Although new development has been focused on attracting airport-related business around the growing Twin Cities International Airport, the recent setbacks to the airline industry and delay in airport expansion plans may affect that, according to industry observers.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt. NET LEASE 2020Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.