by Dan Rafter
Last year was the best year for commercial real estate activity in the Minneapolis/St. Paul market since before the recession.
Don’t believe us? Just ask Cushman & Wakefield|NorthMarq. The real estate firm released its latest Compass Report earlier this month. And the numbers in this report says that the Twin Cities saw its best year for commecial sales, transactions and new construction since 2009.
According to the report, the overall vacancy rate in the market fell to 10.9 percent, with all property types experiencing positive absorption. More than 1 million square feet of new construction hit the market, too.
Mike Ohmes, Cushman & Wakefield|NorthMarq executive vice president, said that the Twin Cities’ momentum should continue into 2015.
“Strong economic fundamentals have made the Twin Cities an attractive market on many levels,” Ohmes said, in a written statement.
How strong as the commercial real estate market in the Twin Cities during the last half of 2014? Here are some key facts:
Investors flocking to the region: Cushman & Wakefield|NorthMarq said that investors from around the nation and the globe are now targeting the Minneapolis/St. Paul market. Their most favored product types are apartments, grocery-anchored retail centers, class-A office assets and high-clearance bulk/distribution buildings.
A multi-family boom: The multi-family market here saw its highest sales volume since 2005, approaching $1 billion in sales at year’s end. About 5,000 new apartment units were delivered to the Twin Cities market in 2014.
Medical office on the rise: The medical office market is strong, too. Cushman & Wakefield|NorthMarq reported that about 905,000 square feet of medical office space is under construction in the first half of 2015, with delivery expected by the end of next year.
Industrial sector strong, too: The Twin Cities’ industrial market is no slouch, either. According to the Compass Report, the Twin Cities’ industrial market reported absorption rates totaling 1.26 million square feet in the second half of 2014. Vacancy rates in this sector dropped to 9.5 percent, the lowest they’ve been since 1996. Developers broke ground on 3.48 million square feet of speculative and build-to-suit projects, the most new construction here since the 1990s.