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ST. PAUL-Although vacancy rates in the competitive Downtown office market remain high, a new study shows that slightly more of the total office space was occupied this year than last.

The overall vacancy for the market, which includes owner-occupied buildings, rose to 10.9% from 10.7% the previous year, reflecting the addition to the market of the new US Bancorp complex at 350,000 sf and Ramsey County’s Adult Detention Center at 32,000 sf, according to a market survey by the St. Paul Area Building Owners and Managers Association.

“St. Paul’s vacancy rate mirrors vacancy rates throughout the country, but the many projects occurring here give us every reason to look ahead with optimism,” according to the report.

The city is in the midst of “one of the most growth-oriented times” in its history, says George Fremder, chairman of the St. Paul Area Building Owners and Managers Association.

Downtown has high ratio of owner-occupied and government buildings, and that’s why the survey takes that into account. Total office space in the market is 16.8 million sf. On a competitive basis, the vacancy rate was 19.4%, up from 18.4% a year ago. Space available totaled 1.8 million sf of vacant space and 115,097 sf of space available for sublease ˜about 20.7% of the total competitive market of 9.4 million sf.”

Other significant pending projects include a renovation at the Lowry Professional Building and an expansion at the Minnesota Public Radio headquarters building.

The report also shows that rental rates for class A space declined by 5.03% to $21.45 per sf from a year ago, while rates for class B dropped 4.44% to $17.36/sf over the same period. Rental rates Class C space rose 8.2% to $15.25 per sf.

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