2015.09.02 EDC Packet - Laserfiche WebLink

Home Browse Search

MARKET REPORT 1 02 2015 1 OFFICE I MINNEAPOLIS -ST. PAUL WEST/NORTHWEST West The vacancy rate in the West submarket is 13.8 percent, which is up from 13.0 percent at Quarter One. Aimia moved out of 143,122 square feet of space at Plymouth Corporate Center for its move to Butler Square in the Minneapolis CBD. In the positive category, Smith Medical moved into 6000 Nathan Lane, exiting its Arden Hills location in the St. Paul Suburban submarket. The West submarket remains strong, with strong sale activity driving up rents at well -leased properties and new owners attempting to capitalize on this hot market. There is, however, a question of whether these higher rents will be sustainable long- term. One office complex where the landlord is increasing rental rates is at The Parkdales. The Excelsior Group, the new owners, are pushing rental rates up $2-3 per square foot, with plans of upgrading the space. No maintenance or upgrades have actually occurred yet, however. The lack of vacancies on the 394 Corridor, especially near the West End, has caused a spillover effect with increased activity farther west. Tenants who are unable to find space in that very tight section of 394 are now looking to places west of 169 and along the Highway 55 Corridor. Northwest Activity in the Northwest submarket was minimal, with absorption of 18,995 square feet occurring. Stronger activity of over 140,000 square feet in the First Quarter, however, brings the year-to-date absorption total to 159,730. This brought vacancy to 15.0 percent, down from 18.2 percent at year-end 2014. COLLIERS INTERNATIONAL I MINNEAPOLIS -ST. PAUL The 494 Corridor is larger in both size and amount of vacant space compared to the 394 Corridor. In the 394 Corridor, vacancy is tightest in properties near The West End at Highway 100 and 1-394. In the Southwest Submarket, vacancy is lowest along the France Avenue Corridor and at Centennial Lakes Office Park and Normandale Lake Office Park, while properties west of Highway 169 along Highway 62 have higher vacancies.