2015.09.02 EDC Packet - Laserfiche WebLink

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400,000 301,473 109,780 a 200,000 32 403 19471 69,336 . 18.995 o` 0 EEL - LL N (200,000) (191,332) (400,000) Airport/South Minneapolis Southwest St. Paul St. Paul West Northwest of the River CBD CBD Suburban MINNEAPOLIS CBD MARKET REPORT 1 02 2015 1 OFFICE I MINNEAPOLIS -ST. PAUL Submarket Highlights The vacancy rate in the Minneapolis CBD is 13.6 percent, down from 14.0 percent in Quarter One. There was over 300,000 square feet of absorption, including Aimia moving into 57,818 square feet of space at Butler Square, and the Star Tribune moving into 120,000 square feet at Capella Tower. The paper's former home in the CBD was razed to make way for Downtown East, the 1.1 million square foot project that will house Wells Fargo's Minnesota corporate campus. There continues to be a significant disparity in rental rates between properties in the North Loop, along Nicollet Mall, and in Class A spaces above the 20th floor, compared to lower -rise spaces and non -prime locations. In prime areas rates are up significantly, while landlords at non -prime locations are aggressively pursuing tenants. The parking issue discussed in our previous market report is still apparent, and is becoming a concern for businesses attempting to locate their companies in the CBD. Apartment -dwellers are occupying more surface -level parking spaces, reducing the number of spaces available for office employees. Parking is becoming more of an issue in the burgeoning North Loop, where developments like T3 are reducing the number of spaces available. This is causing a trickle-down effect for historical Class B properties like Tractorworks and Butler Square, where rental rates are increasing and landlords are no longer offering significant tenant improvement allowances. Parking costs at these buildings are also rising significantly. 02 VACANCY 25- 20 5- 20 m u 15 o 10 18.4% Boa_ 13.6% 15% ■ 15.1% _ ar_ 15.0% 5 — — — — — — — Airport/South Minneapolis Southwest St. Paul St. Paul West Northwest of the River CBD CBD Suburban Hines began construction on T3, a 210,000 -square -foot speculative development being constructed with modern amenities and large floor plates while using wooden construction materials that will fit in with the centuries-old properties in the North Loop. In addition to Wells Fargo at Downtown East, Be the Match, Xcel Energy, and CenterPoint Energy are all under the process of building or renovating new corporate office space. There will be a dramatic increase in vacancy during 2016 as these corporations vacate multi -tenant space to move into their new facilities. COLLIERS INTERNATIONAL I MINNEAPOLIS -ST. PAUL WEST/NORTHWEST 69 ® � ST PAUL 3fi MINNEAPOLIS CBD SUBURBAN ctx CZ SOUTHWEST ST PAUL CBD 151 Vir�rl AIRPORT/ SOUTH OF THE RIVER 5 Q2 ABSORPTION 400,000 301,473 109,780 a 200,000 32 403 19471 69,336 . 18.995 o` 0 EEL - LL N (200,000) (191,332) (400,000) Airport/South Minneapolis Southwest St. Paul St. Paul West Northwest of the River CBD CBD Suburban MINNEAPOLIS CBD MARKET REPORT 1 02 2015 1 OFFICE I MINNEAPOLIS -ST. PAUL Submarket Highlights The vacancy rate in the Minneapolis CBD is 13.6 percent, down from 14.0 percent in Quarter One. There was over 300,000 square feet of absorption, including Aimia moving into 57,818 square feet of space at Butler Square, and the Star Tribune moving into 120,000 square feet at Capella Tower. The paper's former home in the CBD was razed to make way for Downtown East, the 1.1 million square foot project that will house Wells Fargo's Minnesota corporate campus. There continues to be a significant disparity in rental rates between properties in the North Loop, along Nicollet Mall, and in Class A spaces above the 20th floor, compared to lower -rise spaces and non -prime locations. In prime areas rates are up significantly, while landlords at non -prime locations are aggressively pursuing tenants. The parking issue discussed in our previous market report is still apparent, and is becoming a concern for businesses attempting to locate their companies in the CBD. Apartment -dwellers are occupying more surface -level parking spaces, reducing the number of spaces available for office employees. Parking is becoming more of an issue in the burgeoning North Loop, where developments like T3 are reducing the number of spaces available. This is causing a trickle-down effect for historical Class B properties like Tractorworks and Butler Square, where rental rates are increasing and landlords are no longer offering significant tenant improvement allowances. Parking costs at these buildings are also rising significantly. 02 VACANCY 25- 20 5- 20 m u 15 o 10 18.4% Boa_ 13.6% 15% ■ 15.1% _ ar_ 15.0% 5 — — — — — — — Airport/South Minneapolis Southwest St. Paul St. Paul West Northwest of the River CBD CBD Suburban Hines began construction on T3, a 210,000 -square -foot speculative development being constructed with modern amenities and large floor plates while using wooden construction materials that will fit in with the centuries-old properties in the North Loop. In addition to Wells Fargo at Downtown East, Be the Match, Xcel Energy, and CenterPoint Energy are all under the process of building or renovating new corporate office space. There will be a dramatic increase in vacancy during 2016 as these corporations vacate multi -tenant space to move into their new facilities. COLLIERS INTERNATIONAL I MINNEAPOLIS -ST. PAUL