2015.09.02 EDC Packet - Laserfiche WebLink

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MARKET REPORT 1 02 2015 1 OFFICE I MINNEAPOLIS -ST. PAUL SOUTHWEST The vacancy rate in the Southwest submarket is 15.0 percent, down from 15.5 percent in Quarter One. There was 109,780 square feet of absorption, led by Vanco, which moved into 29,451 square feet of space at Northland Plaza. Large complexes such as Normandale Lake Office Park and Centennial Lakes Office Park are setting the high rental rates for the area. Both of these properties have seen strong activity in the past 12-18 months and have low vacancy levels. In addition, the France Avenue Corridor continues to tighten, but properties west of 169 are lagging due to a lack of amenities in close proximity. Given the choice between properties close to Opus Park and those along France Avenue or at Normandale Lake, tenants are choosing the latter locations based available amenities. 0 UnitedHealth Group UnitedHealth Group has been making waves lately in the submarket. While they continue to give space back in the multitenant market as they relocate employees to their new campus in Eden Prairie, there's also uncertainty as to how much space they will keep outside of their corporate campus. The possibility of UnitedHealth Group merging with Aetna brings along the possibility that they will require more space than their current campus has available. Some of UnitedHealth Group's leases on space throughout the Southwest submarket are nearing the end of their terms, and UnitedHealth Group has given no indication or notice of vacating the buildings. We will continue to monitor the activity surrounding this company and its potential relocations. AIRPORT/SOUTH OF THE RIVER The vacancy rate in the Airport/South of the River submarket is 13.0 percent, down from 13.5 percent and Quarter One. There was 32,403 square feet of absorption, bringing the year-to-date total to 75,528. The main notable transaction in this sub -market was the sale of the Delta campus, which had been on the market for nine years. The Excelsior Group purchased the campus, and plans to renovate th facility. The Offices la MOA is a 180,000 -square -foot speculative office building under construction in Bloomington at the Mall of America. The property is being built above retail space and a parking structure and quoted rates are high there at $24. Owners are touting the significant amenities available including abundant retail, restaurant and hotel space, mass transit in close proximity and a large amount of parking available during work hours. COLLIERS INTERNATIONAL I MINNEAPOLIS -ST. PAUL