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e <br /> Q2 2013 I OFFICE <br /> MINNEAPOLIS-ST. PAUL Colliers <br /> OFFICE MARKET REPORT INTERNATIONAL <br /> Vacancy inches downward; large <br /> blocks remain for the numerous <br /> tenants looking for space <br /> n1 <br /> VACANCY AND ABSORPTION TRENDS <br /> Activity <br /> MARKET INDICATORS The Minneapolis-St. Paul office market vacancy rate continued to head downward during the <br /> 02 2013 second quarter of 2013. Vacancy is 15.4 percent, and 263,792 square feet of space was <br /> absorbed for a year-to-date total of 484,900. <br /> VACANCY a <br /> NET ABSORPTION * Activity is strong among medium-to-large users.There are: <br /> >16 users searching for space of 100,000 square feet or more <br /> RENTAL RATE H >10+users in the market in the 20,000-100,000 square foot range <br /> Rental Rates <br /> In the overall market,Class A landlords are offering fewer concessions,holding to their asking <br /> VACANCY rates and in some cases attempting to push rates upward.While some submarkets have seen <br /> 25% lease negotiations reach a tipping point and begin to favor landlords, the market is still <br /> 2" bifurcated. Tenants seeking space at Class A buildings along Nicollet Mall in the CBD and <br /> • 17.eK 164 T <br /> 7Y 2% <br /> µ,qx 16 1A.7%r.s. along the 394 corridor are finding fewer and fewer concessions and seeing landlords hold <br /> . <br /> • Is% S �` rates and push to increase them.Landlords at Class C or Class B buildings lacking significant <br /> ox upgrades are offering very competitive packages to sign tenants. <br /> sx Development <br /> 2005 2006 2007 2008 2009 2010 2011 2012 20132 o No new development outside of corporate users, including UnitedHealth, Target, and Xcel <br /> Energy, are constructing space for their use. Creative developers are finding ways to add <br /> office space without bringing a speculative development to the market. In the Minneapolis <br /> CBD, United Properties purchased the former Neiman Marcus space, and has had strong <br /> NET ABSORPTION interest from office tenants. At 510 Marquette, Swervo Development purchased, and is <br /> 2,000,000 upgrading,the near-vacant property to increase occupancy. <br /> 1,500,000 1.45),191 <br /> • 1,000,000 ve 371 919det1 Sai,9ezvely)+a1e,S00 <br /> e 500,000 <br /> 0 <br /> LL (500,000) <br /> /N1,09f1 <br /> CO (1,000,000) <br /> (1,500,000) <br /> (2,000,000) LOOM)) <br /> 2005 2006 2007 2008 2009 2010 2011 2012 2013 <br /> YTD <br /> www.colliersmsp.com <br />