X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(For more retail coverage, click GlobeSt.com/RETAIL.)

MINNEAPOLIS-The Twin Cities continue to experience a high level of retail construction activity, particularly in Northwest Minneapolis where residential growth is strongest. Solomon Poretsky, regional manager of the Minneapolis-St Paul office of Marcus & Millichap, says, “developers are expected to complete more than four million sf of new retail space for the second straight year as they follow residential growth in the suburbs.”

He says the high level of construction is pushing up the overall vacancy rate slightly, “although the market remains relatively healthy as retail sales growth continues to post solid gains.” He puts the overall retail vacancy rate at 7.3%, but notes that vacancy is below 5% in submarkets to the north, northwest and west.

A first-quarter report from Grubb & Ellis says the overall vacancy rate among 17 area submarkets dropped to just above 6.3% in the year’s opening quarter, down from approximately 6.7% in the same quarter a year ago. The range among the submarkets, according to Grubb data, falls between an approximately 2.3% vacancy in Ridgedale to 13.2% in Brookdale. The latter is one of just four of the submarkets to experience negative absorption in first quarter.

Both Marcus & Millichap and Grubb data confirm that asking rental rates are inching up. Poretsky puts the overall average in the Twin Cities at $17.33 per sf. Grubb data puts the average at $20.18 per sf, with the lowest, $11.76 per sf, in the Calhoun submarket, and the highest, $26.10 per sf, in the Southdale submarket.

Both companies forecast continued strengthening in the retail sector. “The pipeline of new developments continues to grow, and owners of existing centers will continue to renovate and reposition their assets,” say Grubb analysts. “The vacancy rate should decrease slightly as anchor spaces at regional malls are absorbed during the year.” Among them are Mervyn’s units that went on the market in 2004.

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?

 

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
Live Chat

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