minnesota commercial association of realtors 2011 · 2012-03-13 · annual market report minnesota...

A n n u a l M a r k e t R e p o r t

Minnesota Commercial Association of REALTORS®

www.mncar.org

2011

“We’re happy to make our MNCAR Annual Market Report available for the fifth consecutive year. Data was provided by the MNCAR Exchange and reviewed for accuracy by the industry experts listed below. We hope it provides you with another tool to better serve your clients and stay informed on the state of the market.”

- Dara Rudick, Executive Director

2011 MNCARAnnual Market Report

Special thanks to the following MNCAR Market Experts for volunteering to review market data:

INDUSTRIAL

OFFICE

RETAIL

Jesseka DohertyMidAmerica

Tim IgoSuntide

Commercial

Jen HelmNorthMarq

Joe MahoneyHJ Development

David DalyNorthMarq

Andy McConvilleCB Richard Ellis

John McCarthyNorthMarq

Tom StellaNorthMarq

Larry ChevalierColliers

Brian HelmkenCB Richard Ellis

Matt DelisleWelsh Companies

Duane PoppeColliers

Tom SullivanNorthMarq

Aaron SillanpaWelsh Companies

Ryan BartleyCB Richard Ellis

Larissa ChampeauNorthMarq

Greg McMillanNorthMarq

Dan MosseyKraus

Anderson

Tony StraussWelsh

Companies

Zach StenslandWelsh

Companies

Molly TownsendCassidy Turley

Skip MelinCushman & Wakefield

Annual Office Market Report

Sale ListingsBUILDING SIZE 0-10,000 SF 10-25,000 SF 25-50,000 SF 50-100,000 SF 100,000+ SF 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010

Minneapolis CBDSoutheastSouthwestSt. Paul CBDSt. Paul SuburbanWest and NorthwestTOTALS

Lease ListingsCONTIGUOUS SF 0-10,000 SF 10-25,000 SF 25-50,000 SF 50-100,000 SF 100,000+ SF 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010

Minneapolis CBDSoutheastSouthwestSt. Paul CBDSt. Paul SuburbanWest and NorthwestTOTALS

AVAILABLE BUILDING INVENTORY – SALE & LEASENumber of Listings by Submarket

NOTABLE DEVELOPMENTS

Squa

re F

ee

t

Mpls CBD SE SW SP CBD SPSuburban

400,000

300,000

200,000

100,000

0

(100,000)

(200,000)W & NW

% V

ac

ant

25

20

15

10

5

0

234,133

33,999

(34,684)

(137,345)

(34,264)

16.1

18.2

20.321.516.716.7

131,522

VACANCY RATES AND ABSORPTION BY SUBMARKET

NAME CITY SQ. FOOTAGE DEVELOPER STATUS TENANTSHwy 36 Health Center Stillwater Phase I - 15,000 Airlake Development Phase I Under construction HealthEast Phase II - 12,000 August delivery with 50% pre-leased

Two Twelve Chaska 163,000 Mount Development U/C Ridgeview Medical Center Medical Center

Savage Medical Savage 32,000 Davis Group U/C Building

236384

6892

240

537463

6993

253

938213

4742

160

328253

4450

153

67

2006

1352

68

161

121154

142249

22

334245

21

4100229

520132

13

17622432655

290374

1445

18223132255

293402

1485

8057

102207686

421

8275

114266987

453

282843102534

168

303541143137

188

1713216

172498

1514206

192296

86858

1247

95749

1246


% V

ac

ant

Mpls CBD SE SW SP CBD SPSuburban

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0W & NW

11.8

11.6

14.0

21.5 23

.6

23.3

18.3

12.4

18.0

17.2

21.7

18.4

14.7

17.9

17.5

22.3

22.5

Class A Class B Class C17

.4

VACANCY RATES BY SUBMARKETRe

nta

l Ra

te (

$)

Class A Class B

20

15

10

5

0Class C

15.60

2009 2010

15.18

11.72

9.97

12.3511.22

AVERAGE QUOTED NET RENTAL RATES BY CLASS


Avg Quoted Total Universe SF Vacant SF % Vacant Net Absorption SF Rate ($) Avg Op Exp/SF Avg Taxes/SF

MARKET 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010

Mpls CBDClass A Class B Class C Totals

SoutheastClass AClass B Class C Totals

SouthwestClass A Class B Class C Totals

St. Paul CBDClass AClass BClass CTotals

St. Paul SuburbanClass AClass BClass CTotals

West & NorthwestClass AClass BClass CTotals

TOTAL MARKETClass AClass BClass C

TOTALS

2010 MARKET OVERVIEW

13,698,2848,013,5377,105,431

28,817,252

2,460,6892,641,8951,248,0976,350,681

8,269,2205,481,7031,262,178

15,013,101

2,549,1854,205,338

466,6317,221,154

1,367,1253,617,6591,458,5426,443,326

4,957,3185,389,5491,792,748

12,139,615

33,301,82129,349,68113,333,627

75,985,129

1,827,4331,890,5511,163,5064,881,490

770,556618,507147,424

1,536,487

2,156,519899,579327,000

3,383,098

303,9811,082,744

72,9971,459,722

235,313558,887260,375

1,054,575

570,5771,134,121

248,5871,953,285

5,864,3796,184,3892,219,889

14,268,657

1,618,4471,786,9061,241,3764,646,729

344,508568,654144,339

1,057,501

1,929,0321,005,315

297,7523,232,099

458,841946,93557,755

1,463,531

296,061627,756251,508

1,175,325

729,618964,896329,880

2,024,394

5,376,5075,900,4622,322,610

13,599,579

13.323.616.416.9

31.323.412.024.3

25.716.425.922.4

13.224.515.720.3

17.214.817.915.9

11.621.314.116.2

17.720.816.7

18.7

11.822.317.516.1

14.021.511.616.7

23.318.323.621.5

18.022.512.420.3

21.717.417.218.2

14.717.918.416.7

16.120.117.4

17.9

(190,733)(170,726)

158,989 (202,470)

(394,496)(146,530)

92,136 (448,890)

(46,862)(117,666)(41,953)

(206,481)

(137,189)76,032 (1,210)

(62,367)

55,356 (271,944)(24,716)

(241,304)

(213,643)(136,182)

73,873 (275,952)

(927,567)(767,016)

257,119

(1,437,464)

208,986103,645(78,498)234,133

102,62825,8093,085

131,522

110,487(105,736)

29,24833,999

(95,349)45,42315,242

(34,684)

(60,748)(68,869)(7,728)

(137,345)

(122,196)169,225(81,293)(34,264)

143,808169,497

(119,944)

193,361

15.2711.2211.4512.05

14.4016.2110.7114.33

16.1011.9110.7013.19

12.9310.5010.2610.86

14.7711.7714.0212.99

17.2512.5812.7813.82

15.6012.3511.72

13.04

16.2011.0410.0011.65

14.5211.269.57

12.09

15.0811.3410.1812.53

12.909.599.00

10.48

14.3810.658.17

11.70

16.1711.9810.3813.00

15.1811.229.97

12.22

7.75 7.74 6.51 7.23

6.84 5.50 5.59 5.93

7.53 7.48 6.55 7.36

9.39 7.56 5.05 7.74

5.85 6.26 5.83 6.10

7.77 6.85 6.64 7.04

7.31 6.89 6.34

6.89

7.628.006.487.30

6.785.546.396.13

7.357.236.157.11

9.407.885.008.16

5.525.995.425.77

7.597.166.567.15

7.186.946.34

6.89

5.15 2.90 2.29 3.16

3.74 3.07 2.47 3.15

4.49 3.22 2.50 3.64

5.65 2.23

2.99

3.69 3.01 1.71 3.14

4.40 3.58 2.52 3.60

4.37 3.12 2.37

3.36

5.012.932.393.20

3.793.152.493.23

4.523.332.963.79

3.632.40

2.74

4.103.352.163.52

4.603.582.613.71

4.393.252.54

3.50


GROUND RULES

• Thisreportcoversonlypure,multi-tenantofficebuildingsinexcessof20,000squarefeet.Itthereforedoesnotincludemedical office buildings, or buildings containing solely government offices.

• Propertiesthatweredesignedtobemulti-tenantareincludedinthisreporteveniftheyhavebeenleasedentirelytoone tenant. Single tenant leased properties that were developed on a build-to-suit basis, and that would not function well as multitenant properties, are not included in this report. Owner occupied properties are also not included in this report.

• Rentalratesarebasedonquotednetrates.Actualeffectiverateswillvary.• Salelistingcountsincludeindividualcondounitsassinglelistings.Forinstance,a50,000squarefootbuildingdividedinto

five10,000squarefootcondos,eachwithaseparateForSalelisting,wouldcontribute5listingstoourlistingcounttotals.

DEFINITIONS

• ExistingProjects:BuildingconstructioncompletedpriortoDecember31st,2010.• Vacantspace:Spacethatisunoccupiedandnotunderlease.• Absorption:ThepositiveornegativedifferenceintheamountofspaceoccupiedbetweenDecember31st,2009and

December 31st, 2010.• SpacethatisphysicallyoccupiedbyatenantpriortoDecember31st,2010,butmarketedforleaseisconsidered

occupied space.• Subleasespace,eitherphysicallyoccupiedorvacant,isconsideredoccupiedspaceintheuniverseuntilthelease

runs out.• Spaceoccupiedbyatenantonamonth-to-monthleasethatisalsomarketedforleasetoanew,long-termtenantis

considered occupied space.• Thereportdoesnottrack“shadow”space,orbuildingsthatareleasedbytenantswhoarenotusingthespacebutnot

trying to sublease it.• Contiguousspace:Havingacommonboundary;spacethatisdirectlyadjacenttoanotherspaceorspaces.• Averagequotedrateswerebasedonsingle,double,andtriplenetrates.

Annual Industrial Market Report

AVAILABLE BUILDING INVENTORY – SALE & LEASENumber of Listings by Submarket

Squa

re F

ee

t

400,000

300,000

200,000

100,000

0

(800,000)

(200,000)

(300,000)

% V

ac

ant

20

15

10

5

0

East Northwest

(248,094)

Southeast

167,717

Southwest

303,347

11.411.8

17.1

14.0

Northeast

90,627

11.6

4,627

VACANCY RATES AND ABSORPTION BY SUBMARKET

Sale ListingsBUILDING SIZE 0-25,000 SF 25-50,000 SF 50-100,000 SF 100-200,000 SF 200,000+ SF 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010

EastNortheastNorthwestSoutheastSouthwestTOTALS


EastNortheastNorthwestSoutheastSouthwestTOTALS


NAME CITY SQ. FOOTAGE DEVELOPER STATUSMeridian Industrial Center St. Paul 68,000 Industrial Equities ProposedRoseville Interstate Center Roseville 32,400 Industrial Equities ProposedBlaineMiniStorageFacility Blaine 77,000 Unavailable U/CBituminous Roadway - Shops/Office Mendota Heights 22,000 Unavailable U/C

31109923038

300

321321013948

352

1433532620

146

1337562525

156

820279

1882

72131112393

07

11108

36

13756

22

12153

12

35263

19

77294280190250

1091

61309285202248

1105

2475

1036082

344

1791

1036284

357

1533422947

166

1031392347

150

81421129

64

519218

1265

13553

17

24654

21


% V

ac

ant

East Northeast Northwest Southeast Southwest

30.0

25.0

20.0

15.0

10.0

5.0

0.0

12.6

8.4

12.7

12.3

10.1

14.0

14.2

13.7

13.0

11.5

8.4 9.

8

23.0

18.8

Bulk Warehouse Office Showroom Office Warehouse

13.9

VACANCY RATES BY SUBMARKET AND PRODUCT TYPE

Rent

al R

ate

($)

Bulk Warehouse Office Showroom

10

8

6

4

2

0

Office Warehouse

7.75

2009 2010

Offi

ce

Wa

reho

use

Offi

ce

Wa

reho

use

4.34

7.89

4.35

9.81

Offi

ce

Wa

reho

use

Offi

ce

Wa

reho

use

5.41

9.23

5.37

8.39

Offi

ce

Wa

reho

use

Offi

ce

Wa

reho

use

4.77

8.18

4.71

AVERAGE QUOTED NET RENTAL RATES BY PRODUCT TYPE


Total Avg Quoted Avg Op Universe SF Vacant SF % Vacant Net Absorption SF Rate ($) Exp/SF Avg Taxes/SF

MARKET 2010 2009 2010 2009 2010 2009 2010 2009 2009 2010 2010 2009 2010 2009 2010 WH Off WH Off


EastBulk Warehouse Office Showroom Office Warehouse Totals

NortheastBulk Warehouse Office ShowroomOffice WarehouseTotals

NorthwestBulk Warehouse Office ShowroomOffice WarehouseTotals

SoutheastBulk WarehouseOffice ShowroomOffice WarehouseTotals

SouthwestBulk Warehouse Office ShowroomOffice WarehouseTotals

TOTAL MARKETBulk Warehouse Office ShowroomOffice Warehouse

TOTALS

3,121,5261,800,9742,803,5757,726,075

8,320,4924,127,723

20,574,38833,022,603

10,752,9844,848,050

13,802,46429,403,498

7,660,8284,090,6947,014,744

18,766,266

4,456,2846,835,272

12,840,57424,132,130

34,312,11421,702,71357,035,745

113,050,572

404,347150,935321,756877,038

695,421522,641

2,600,7073,818,769

1,087,729677,878

1,704,2233,469,830

1,763,921771,048686,724

3,221,693

612,011953,067

1,818,2823,383,360

4,563,4293,075,5697,131,692

14,770,690

367,306226,873287,486881,665

1,115,263462,178

2,585,1794,162,620

1,234,665377,708

1,748,5993,360,972

1,967,450643,426780,534

3,391,410

799,2471,048,2021,758,9553,606,404

5,483,9312,758,3877,160,753

15,403,071

(37,041)75,938

(34,270)4,627

204,140(60,463)(53,050)

90,627

29,663(297,283)

19,526(248,094)

203,529(127,622)

93,810169,717

148,236196,842(41,731)303,347

548,527(212,588)(15,715)

320,224

(8,792)101,898

(168,772)(75,666)

(523,921)158,670

(736,867)(1,102,118)

(292,944)(114,909)(423,660)(831,513)

(303,713)52,284

(126,961)(378,390)

(313,148)(107,063)(95,819)

(516,030)

(1,442,518)90,880

(1,552,079)

(2,903,717)

13.08.4

11.511.4

8.412.712.611.6

10.114.012.311.8

23.018.89.8

17.2

13.713.914.214.0

13.314.212.5

13.1

11.812.310.311.3

12.911.212.512.4

11.57.8

12.711.4

25.715.711.118.1

17.916.413.715.2

15.812.912.5

13.6

4.287.054.835.70

4.355.324.724.81

4.535.514.474.74

4.134.904.654.63

4.235.435.205.18

4.345.414.77

4.89

7.9911.319.96

10.19

8.048.757.848.09

8.359.118.278.51

7.699.088.018.38

6.959.338.228.49

7.899.238.18

8.47

4.496.066.376.01

4.385.484.454.70

4.445.364.304.61

4.105.295.144.96

4.625.244.864.97

4.355.374.71

4.87

0.662.241.871.76

1.091.572.602.21

1.228.281.623.48

4.581.731.412.22

1.131.893.512.71

2.043.292.44

2.65

0.682.411.531.73

1.081.512.291.98

1.2611.361.754.01

4.422.183.483.18

1.372.241.741.88

2.034.042.18

2.72

1.421.991.721.75

1.582.211.591.74

1.762.361.791.96

1.281.931.741.73

1.282.211.781.89

1.532.161.71

1.83

1.341.671.561.55

1.442.221.471.63

1.552.451.831.93

1.182.001.621.66

1.022.031.771.79

1.352.141.66

1.75

5.959.866.898.07

7.539.038.078.23

8.3712.458.589.47

7.798.547.858.11

7.129.459.089.00

7.759.818.39

8.71


GROUND RULES• Multi-tenantofficewarehouse,officeshowroom,andbulkwarehousebuildingsinexcessof25,000squarefeet.Single-

tenant leased properties that were developed on a build-to-suit basis, and that would not function well as multi-tenant properties, are not included in this report. Owner occupied properties are also not included.

• Rentalratesarebasedonquotednetratesexclusiveoftransactioncosts.Actualeffectiverateswillvary.

DEFINITIONS

• ExistingProjects:BuildingconstructioncompletedpriortoDecember31st,2010.• Vacantspace:Spacethatisunoccupiedandnotunderlease.• Absorption:ThepositiveornegativedifferenceintheamountofspaceoccupiedbetweenDecember31st,2009and

December 31st, 2010.• SpacethatisphysicallyoccupiedbyatenantpriortoDecember31st,2010,butmarketedforleaseisconsidered

occupied space.• Subleasespace,eitherphysicallyoccupiedorvacant,isconsideredoccupiedspaceintheuniverseuntilthelease

runs out.• Spaceoccupiedbyatenantonamonth-to-monthleasethatisalsomarketedforleasetoanew,long-termtenantis

considered occupied space.• Thereportdoesnottrack“shadow”space,orbuildingsthatareleasedbytenantswhoarenotusingthespacebutnot

trying to sublease it.• Contiguousspace:Havingacommonboundary;spacethatisdirectlyadjacenttoanotherspaceorspaces.Average quoted rates were based on single, double, or triple net rates.

PROFILE OF PROJECT TYPES

Project Type Typical Tenant Size Clear Ceiling Height Bay Depth Office or ShowroomOfficeWarehouse 7,000Sq.Ft.+ 16-24Ft. 120-160Ft. 10%-40%OfficeShowroom 3,000Sq.Ft.+ 12-16Ft. 80-120Ft. 25%-75%BulkWarehouse 20,000Sq.Ft.+ 20+Ft. 160-200Ft. 0%-10%

Annual Retail Market Report

Sale ListingsCENTER TYPE Neighborhood Centers Community Centers Regional Centers Downtown Retail 2009 2010 2009 2010 2009 2010 2009 2010

49 56 20 21 3 3 7 0

AVAILABLE BUILDING INVENTORY – SALE & LEASENumber of Listings by Center Type

Squa

re F

ee

t

2,500,000

2,400,000

2,200,000

2,000,000

1,800,000

1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

% V

ac

ant

40

35

30

25

20

15

10

5

0

CBDs Neighborhood RegionalCommunity

330,919

2,418,051

1,539,654

10.5

7.0

999,630

5.3

19.8

VACANCY BY CENTER TYPE


Neighborhood Centers 308 331 57 67 15 20 0 1 0 0Community Centers 68 88 23 26 10 11 6 10 2 2Regional Centers 17 22 7 10 5 6 0 1 0 0Downtown Centers 8 2 14 4 4 2 1 0 1 0


NAME CITY SQ. FOOTAGE DEVELOPER STATUS TENANTSDunkirkSquareOutlots MapleGrove 10,900 Reliance U/C Verizon,Pro-cutsCommerce Hill Woodbury 174,853 JMW Development U/C Super TargetWalgreens St Paul - Highland Park 16,000 Semper Development U/C WalgreensWest 78th Marketplace Eden Prairie 7,000 Oppidan Completed Smash Burger, 1Qof2011 Verizon,SportsClips

These counts include listed properties on the MNCAR Exchange within the seven-county area and uses the Center Types assigned to properties there. These do not match the center types used for generating vacancy and rate statistics in all cases.


Exp

ens

es

($)

15.0

10.0

5.0

0.0

10.83

CBDs Community

3.20

Neighborhood

3.35

Regional

5.73

AVERAGE TOTAL EXPENSES BY CENTER TYPERe

nta

l Ra

te (

$)

30

20

10

0

CBDs

20.29

Neighborhood

15.43

Community

17.96

Regional

22.07

QUOTED NET RENTAL RATES BY CENTER TYPE



These figures do not take sublease and “shadow” space into account.

Avg Quoted Total Universe SF Vacant SF % Vacant Rate ($) Avg Op Exp/SF Avg Taxes/SF

MARKET 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010

CBDs Community Neighborhood Regional

TOTAL MARKET

1,674,692

18,722,189

23,072,419

22,018,840

65,488,140

1,357,746

17,240,145

22,352,883

21,681,191

62,631,965

330,919

999,630

2,418,051

1,539,654

5,288,254

498,798

1,411,148

2,324,637

1,298,997

5,533,580

36.7

8.2

10.4

6.0

8.8

19.8

5.3

10.5

7.0

8.08

21.00

18.33

16.70

24.95

17.44

20.29

17.96

15.43

22.07

16.27

10.26

3.37

3.33

4.75

3.70

10.83

3.20

3.35

5.73

3.78

4.23

4.24

3.73

5.09

3.91

3.83

4.42

3.92

5.90

4.11


GROUND RULES

• Multi-tenantretailpropertiesinthe7-countymetroareainexcessof30,000squarefeet.• Rentalratesarebasedonquotednetratesexclusiveoftransactioncosts.Actualeffectiverateswillvary.

DEFINITIONS

• ExistingProjects:BuildingconstructioncompletedpriortoDecember31st,2010.• Vacantspace:Spacethatisunoccupiedandnotunderlease.• Absorption:ThepositiveornegativedifferenceintheamountofspaceoccupiedbetweenDecember31st,2009 and December 31st, 2010.• SpacethatisphysicallyoccupiedbyatenantpriortoDecember31st,2010,butmarketedforleaseisconsidered occupied space.• Subleasespace,eitherphysicallyoccupiedorvacant,isconsideredoccupiedspaceintheuniverseuntilthe lease runs out.• Spaceoccupiedbyatenantonamonth-to-monthleasethatisalsomarketedforleasetoanew,long-term tenant is considered occupied space.• Thereportdoesnottrack“shadow”space,orbuildingsthatareleasedbytenantswhoarenotusingthespace but not trying to sublease it.• Contiguousspace:Havingacommonboundary;spacethatisdirectlyadjacenttoanotherspaceorspaces.• Averagequotedrateswerebasedonsingle,double,ortriplenetrates.

PROFILE OF PROJECT TYPES

Regional Center: 400,000 square feet and upCommunity Center: 150,000-399,999 square feetNeighborhood Center: 30,000-149,999 square feetCentral Business Districts of Minneapolis & St. Paul: Regardless of square footage

MNCAR EXCHANGE 2011 LEADERSHIP

PRESIDENT Tim Igo Suntide Commercial

PAST PRESIDENT Sheila Devine Meyer Commercial

MNCAR PRESIDENT Nathan Arnold CB Richard Ellis

DIRECTORS Nathan Arnold CB Richard Ellis Lisa Christianson Christianson & Company Tony Deldotto NorthMarq MartyFisher PremierCommercialProperties Dirk Koentopf NorthMarq JeffLaFavre Colliers John McCarthy NorthMarq Bill Ostlund CBC Griffin Companies Dan Peterson Adam Commercial Whit Peyton CB Richard Ellis Mike Salmen Equity Transwestern Bill Wardwell NAI Welsh

MINNESOTA COMMERCIAL ASSOCIATION OF REALTORS 2011 LEADERSHIP

PRESIDENT Brad Bulter Liberty Property Trust

PRESIDENT-ELECT Tom Tracy NorthMarq

PAST PRESIDENT Nathan Arnold CB Richard Ellis

DIRECTORS Bryan Beltrand NAI Welsh AnnaCoskran Nelson,Tietz&Hoye Todd Hanson NorthMarq Mike Honsa Transwestern Jim Jetland NorthMarq Stefanie Meyer NorthMarq Duane Poppe Colliers Steve Shepherd NAI Welsh Phil Simonet Paramount Real Estate Corporation Nils Snyder NAI Welsh Mark Steingas Copperwood Investments Brian Wasserman CB Richard Ellis

2011 Annual Market Report

MNCAR believes the information contained within this report to be accurate. MNCAR accepts no responsibility if this is found not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein.

www.mncar.org

minnesota commercial association of realtors 2011 · 2012-03-13 · annual market report minnesota...

Documents