06-00734_E-News June 06

Dear Clients and Friends:

As fall feels officially here and kids are back at school, we bring you the September edition of
E-News. In this issue you will find an excerpt from the Q2 Colliers Industrial Study, a profile of our Appraisal division, and an overview of some current assignments.

We are energized as we are experiencing growth and continued success as a company. We are pleased to have the opportunity to share some of these positive things with you. As always, we are here to assist you with any of your commercial real estate needs.

Warm Regards,
Jeff LaFavre, CCIM, MCR, SIOR

September 2006

Ross Moore, Senior Vice President, Market and Economic Research, Colliers International

Industrial Has a Good Quarter
Excerpt from Colliers Q2 2006 Industrial Study
by Ross Moore, Colliers International

Industrial markets posted another vibrant quarter with Q2 results showing healthy demand and only modest new construction pushing vacancies lower. While the US economy moderated in the second quarter, demand for warehouse space stayed strong reflecting a relatively robust manufacturing sector. Completions dipped lower, running contrary to the longer term trend which is expected to re-gain traction next quarter. Consistent with strengthening fundamentals, rents posted a modest increase during the quarter.

Demand for warehouse space ramps back up. Second quarter absorption returned to levels witnessed for much of 2005, with occupied space increasing by 50.3 million square feet (MSF). This was 10.4 MSF more than Q1 but more or less in line with the same quarter a year ago. Year-to-date absorption now totals 90.2 MSF and full year 2006 absorption is still expected to be in excess of 200 MSF.

Industrial vacancy rate drops a further 16 basis points. After registering just modest declines in the prior two quarters, the US industrial vacancy rate fell 16 basis points during the 2nd quarter to register 8.34%. This was more in line with early 2005 and late 2004 when vacancies fell by 20 basis points or more.The US vacancy rate a year ago was 8.9%.

Industrial market still expected to meet 2006 forecast. Despite numerous signs the US economy is slowing, including a lackluster Q2 GDP report, the US industrial market is expected to meet a somewhat optimistic forecast made at the beginning of the year. Considerably momentum remains in most markets which is anticipated to support leasing markets through at least the end of 2006. The manufacturing and logistics industries remain very robust reflected by such indicators as the ISM manufacturing index which continues to show expansion. This despite significant geopolitical tensions and still rising energy costs. In line with forecasts made at the beginning of the year, construction levels continue to rise meaning vacancy declines will be increasingly muted even with demand staying strong. Rents as a result will only increase by 10% by year-end, but will provide some relief for developers who have been struggling with rising construction and land costs.

Click here to download the entire Industrial Report (pdf)

Featured Team:

Appraisal/Consultation Services Group

Colliers Minneapolis/St. Paul's Appraisal Division specializes in:

valuation and counseling assignments pertaining to property disposition
mortgage financing
real estate tax abatement
condemnation
lease and rental rate analysis
market analysis
estate valuation
site selection

Clientele includes major banks, lending institutions, insurance companies, pension funds, developers, governmental agencies, major industries, real estate service companies, private investors, attorneys, mortgage bankers, and other entities involved in making significant real property decisions.

Dan Boris	Daniel T. Boris, MAI, SRA Vice President Specialty: Appraisal, Consultation, Market Analysis, Litigation, Feasibility Analysis Memberships: Appraisal Institute Region III Ethics and Review Counseling National Committee member. Certified Real Property Appraiser, Minnesota State Department of Commerce Registered Appraiser – Federal National Mortgage Association (FNMA) Chicago, Illinois. Fee Appraiser – U.S. Department of Veterans Affairs (VA), Saint Paul Minnesota Regional Office. Fee Appraiser – U.S. Department of Housing and Urban Development (H.U.D.), Minneapolis Regional Office. 1st Place Award from the Minnesota Creative Computer Symposium for development of a computer program which analyzes and calculates cash equivalency of non-market financed real estate transactions, July, 1983. Member, International Right-Of-Way Association Member, Minnesota Employee Relocation Council Member, Minneapolis Building Owners and Managers Association (BOMA) Member, Minnesota Association of Mortgage Brokers Recent Completed Assignment: MNDOT roadway easement Mendota Heights, Minnesota Condemnation
Teresa Cornellison	Teresa Cornellison Associate Specialty: Appraisal, Consultation Memberships: Appraisal Institute Recent Completed Assignment: Cincinnati Lamb Industrial Fond du Lac, Wisconsin Asset determination
Al Leirness	Alan Leirness, MAI, CCIM Vice President Specialty: Appraisal, Consultation Memberships: Appraisal Institute – Member (MAI) Commercial Investment Real Estate Institute – Member (CCIM) National Association of Industrial and Office Parks (NAIOP) – Affiliate Member Building Owners and Managers Association (BOMA) – Affiliate Member International Association of Assessing Officers (IAAO) – Associate Member Certified General Real Property Appraiser in the State of Minnesota, License No. 4001527 Qualified as an expert witness in Anoka County District Court, Scott County District Court, Carver County District Court, Hennepin County District Court, Ramsey County District Court, Olmsted County District Court in Minnesota and Grant County Circuit Court and Dunn County Circuit Court in Wisconsin as well as, Minnesota Tax Court and Federal Bankruptcy Court. Served as court-appointed commissioner on real estate and business valuation issues on property located in Hennepin County and Washington County Recent Completed Assignment: Holiday Mall Shopping Center Moorhead, Minnesota Bank financing
Christy Mackaman	Christy Mackaman Associate Specialty: Appraisal, Consultation Memberships: Appraisal Institute Recent Completed Assignment: 3 Snyders Drugstores Mounds View, Mahtomedi, & St. Paul, Minnesota Asset determination
Scott Neu	Scott E. Neu, MAI Second Vice President Specialty: Appraisal, Consultation Memberships: Designated MAI Member of the Appraisal Institute Member, St Cloud State University Real Estate Alumni Organization Certified General Real Property Appraiser, State of Minnesota Certified Real Estate Sales Agent, State of Minnesota Recent Completed Assignment: ECM Publishers Coon Rapids & Princeton, Minnesota Bank Financing
Rodger Skare	Rodger Skare, MAI Senior Vice President, Principal Specialty: Appraisal, Consultation Memberships: Member, Appraisal Institute (MAI) Member, International Right-of-Way Association Certified General Real Property Appraiser, State of Minnesota Certified Real Estate Sales Agent, State of Minnesota Member, Minneapolis Board of Realtors. Member, National Association of Industrial and Office Properties. Recent Completed Assignment: MNDOT roadway taking Belle Plaine, Minnesota Condemnation