X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

MINNEAPOLIS-Downtown Minneapolis saw its vacancy rates shoot up in the first half of the year, mostly in the class B segment, as this submarket of the Twin Cities experienced a negative absorption of one million sf. The class B segment was hit by the relocation of American Express Financial Advisors from 600,000 sf of leased space to its own buildings and a number of other firms that moved up to class A from B space, according to Colliers Towle.

Vacancy rates rose to 17.5% from 14%–and that doesn’t include the sublease space up for grabs. When that is factored in, the vacancy rate of the market comes in at 21%, up from 17.1% a year ago, the report says. The only new building to come on line was Stone Arch Plaza, a 62,000-sf building rehabilitated by Brighton Development, based in Minneapolis. Among the new tenants were the McKnight Foundation, MSR Architects and the Mill City Museum.

Class A spaces have the majority of sublease space available, with some 709,000 sf of space up for sublease. But it was the B pieces that were hardest hit in the first half, with some 820,000 sf in tenant losses. The biggest was American Express Financial Advisors exit from the Baker Block and Northstar Center. As a result, the vacancy rate in this category jumped to 23.2% from 13.8%.

Class C vacancies also climbed to 23% as it experienced a negative absorption of some 26,000 sf and the nearly vacant Bridge Place building that is being marketed as a multi-tenant facility.

Finally, the renovated segment of the market saw a negative absorption of 239,000 sf, pushing the vacancy rate up to 18.9% from 11.4% the previous year. Most of the tenant losses came in the Ames & Fisher Building, Minneapolis Grain Exchange and Lumber Exchange.

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?

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.