The Saint Paul, Minn., office sector remains a steady one, according to the latest findings from the Greater Saint Paul Central Building Owners and Managers Association, an organization better known as BOMA.
Of course, not every major office building in the Saint Paul market shared in the good news. While occupancy rates have fallen in some key city office buildings, they’ve risen in others.
BOMA’s 2012 Saint Paul Office Market Report shows that office occupancy in the Saint Paul Central Business District remains steady at a solid 90 percent, good news for brokers and building owners in this district.
“The interest in commercial office space in Saint Paul is strong, but there is intense competition for tenants,” said Patrick Skinner, chair of the Greater Saint Paul BOMA. “Our biggest task is to ensure that our offerings are consistently competitive, and we believe we are meeting that goal.”
According to BOMA’s report, the most significant occupancy changes in competitive space during the last year took place in the following buildings:
· Occupancy increases at 180 East 5th Street (31,011 square feet), Lawson Commons (25,000 square feet) and Landmark Towers (12,000 square feet).
· Occupancy decreases at 375 Jackson (80,000 square feet), Sibley Square (26,343 square feet), Bremer Tower (15,172 square feet) and 555 Park Office Building (13,000 square feet).
Part of the reason for the strong office market in Saint Paul? There has been little new construction in this sector. In fact, the amount of office space available here has actually diminished.
The BOMA report says that total office space in the Saint Paul Central Business District decreased by 128,010 square feet (less than one percent) from 2011 to 2012. The most significant reasons for the decrease are:
· The removal of the Public Safety Building (72,327 square feet of Government space) and University Club Downtown (25,466 square feet of Class C space) from the report.
· The decrease in the Exchange Building’s square footage (23,000 square feet) because its basement space is not being marketed for lease.
Median gross rental rates increased in Class-A and Class-B space, and have remained flat in Class-C space since 2007.
The quoted median rate for Class-A space is $24.43 per square foot (up from $22.95 in 2011), Class-B space $18.17 (up from $17.83 in 2011) and Class-C space $15 per square foot.
— Dan Rafter