X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(To read more on the industrial market, click here.)

MINNEAPOLIS-Industrial companies absorbed 2.5 million sf of industrial real estate space in the Twin Cities metro area during the first six months of 2005—about double the amount of industrial space absorbed over the last four years combined, according to a preview issued Monday of United Properties’ mid-year 2005 Outlook market study.

The vacancy rate dropped to 13% the first half of 2005 from 15.5% at year-end 2004. The net rental rates remained flat at $4.33/sf for warehouse properties and $7.98/sf for office warehouse properties over the six-month period.

“Given the limited supply of new construction and fewer user buildings being offered for sale, companies are turning to the existing supply of for-lease industrial space,” says Scott Moe, vice president of industrial brokerage for United Properties.

Moe predicts the market could “comfortably absorb” another 1.5 million sf to 1.7 million sf of space over the second half of the year, which would reduce vacancy by as much as two points and likely trigger additional speculative construction.

United Properties at the end of last year projected that by the end of this year the Twin Cities industrial market absorption could reach 2 to 2.5 million sf—about double 2004′s 1.2 million sf of absorption. That’s an impressive rebound given that the net absorption from for the three years from 2001 to 2003 was just 72,000 sf.

Bulk warehouse leases, several with national retailers, accounted for 1.1 million sf of first half 2005 absorption. Wal-Mart, SuperValu and Target all signed distribution center deals ranging from 100,000 sf to 300,000 sf. The leases are typically short-term, giving the tenants the ability to remain flexible until there is more certainty related to long-term economic growth, Moe says.

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
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt. NET LEASE Spring 2021Event

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 © 2021 ALM Media Properties, LLC. All Rights Reserved.