As managing director in the Minneapolis office of Jones Lang LaSalle, Tad Jellison knows the commercial real estate market in Minneapolis/St. Paul. And the good news? Jellison is seeing more commercial deals in the Twin Cities.
Midwest Real Estate News: Let’s start with an overall view: Are you seeing more commercial real estate activity in the Twin Cities today than you were last year or the year before?
Tad Jellison: There is definitely more activity. The main difference is that I am seeing a lot of real deals. Before, we had been seeing a lot of tire kickers. Of course, it’s all relative. We aren’t seeing as much activity as we did before the recession. But we are today seeing real deals in our market.
MWREN: Why is this?
Jellison: I think that we are seeing a more optimistic corporate base right now. We are seeing, although there is still a lot of unemployment out there, some companies getting a better handle on their business moving forward. They are taking risks that they would not have done a year ago.
MWREN: What has to happen to boost commercial activity to an even greater degree?
Jellison: We have to see even more confidence in the economy, and not only in the local and national economy, but in the foreign economy. A fair amount of companies in the Twin Cities market are also doing business globally. There is still a lot of uncertainty in the global market that is slowing the recovery here.
MWREN: You specialize in office space. What sectors in the Twin Cities are seeing relatively strong office activity today?
Jellison: The West corridor in Minneapolis is doing very well right now. When talking about office space, that corridor continues to be fairly strong. That has been one of the stronger office submarkets in the Twin Cities. The Southwest submarket has rebounded quite well, too. We have some very strong local corporations that are backfilling space in that market. We are seeing a much stronger Southwest market than we saw two years ago.
MWREN: Are there any reasons why the Twin Cities, though they certainly have seen a slowdown in commercial real estate since the recession, haven’t suffered quite as much as other Midwest markets?
Jellison: One of the reasons we haven’t suffered as much is that the Twin Cities market has a fair amount of nationally headquartered corporations. We have the likes of Target and US Bank. Those are two national companies in the downtown market who have had a huge impact in the marketplace and in the rebounding of the office market downtown.
MWREN: What do you see in the near future when it comes to the Twin Cities’ office sector?
Jellison: That’s hard to say. There is still a lack of stability in the global markets right now. Even in China they are talking about the fact that their manufacturing sector has decreased over the last couple of quarters. There is so much instability overseas. There is enough uncertainty that corporations aren’t making decisions unless they have to. There has been some job growth in certain sectors. There has been some momentum. Will it sustain itself? That is the question.
— Dan Rafter