July 2007
Jim Mayland
Q2 Highlights
By Jim Mayland, Research Manager
Office
This could be the year that office development picks up once again. After a couple of prior years of limited development, there are several projects in the works right now, especially in the South and Southwest metro.
The Twin Cities office market continued its strong overall trend of positive absorption into the second quarter of 2007.To read the full Office Report, click here.
Industrial
Leadership in Energy and Environmental Design (LEED) seems to be the hot topic on the industrial front, with the focus on new office showroom and office warehouse development. While proposed developments are surfacing, there are a few developers that have secured land parcels and are moving forward, though land assemblage has proved difficult.
The multi-tenant Industrial universe had negative absorption of 790,464 SF for the second quarter. To read the full Industrial Report, click here.
Retail
Retail markets continue to show healthy growth despite a more sluggish economy and a decidedly more downbeat housing market. A combination of modest job creation and above trend wage growth has helped sustain consumer spending at relatively high levels. Retailers have continued to expand and launch new concepts adding to the demand for space and keeping leasing markets robust.
Retail Highlights by Ross Moore, Colliers International Market & Economic Research
Multi-Family
Nationally
- Cap rates have leveled in most markets but remain low and aggressive for now, despite the recent increase in long term interest rates.
Locally
- Virtually no new construction in suburban areas due to lack and cost of entitled sites, construction costs vs. market rents, and local reluctance toward approval of new rental housing.
- 2007 will continue the trend of strong absorption, resulting in vacancy rates near 5% and rent growth averaging 3-5%.
- Cap rates in the 5% range continue for Class A projects due to lack of product on the market and continued institutional and local appetites for quality multi-family product.
The full Multi-Family Q2 Report will be available in the next edition of E-News
Featured Industrial Sales & Leasing Experts
Steve Larson, CCIM
Steve Larson, CCIM has been a fixture of the Twin Cities commercial real estate market for 31 years. He joined Colliers in 1985 after spending nine years with Thorpe Brothers, Inc. as a sales associate. Steve has been awarded many distinctions during his tenure with Colliers. In 1996, 1997, 2003 and 2004 he received a “Distinguished Level” sales award, in 1999 he received an “Executive Level” sales award, and in 2006 Steve was recognized as the Industrial Broker of the Year.
Some of the significant clients that Steve has represented include: CSM Corporation, Duke Weeks, First Industrial Realty Trust, Hillcrest Development, Norwest Bank, St Paul Companies, SuperValu, Trane Heating and Air Conditioning, US West and Vision World. Steve is currently a member of NAIOP, MNCAR and holds his CCIM (Certified Commercial Investment Member) designation.
Ronald Scholder, SIOR
Ronald Scholder, SIOR rejoined Colliers in 2002 to continue his now 29 years of service to the commercial real estate industry. Ron has a wide range of real estate experience which he has put to work for both corporate accounts and real estate investors. He has earned the respect of his clients through an intense focus on their needs and a long term approach to business relationships.
Over the 28 years of Ron’s career, he has represented a wide variety of clients including: American Iron, Celestica, ConAgra, Inc., Federal Reserve Bank, Gillette Company, Medtronic, Inc., Minneapolis Parks Board, Musicland Group/Best Buy, Nabisco, Inc., Nash Finch Company, Select Comfort, State of Minnesota and TYCO-ADT. Ron is a current member of NAIOP, MNCAR and holds his SIOR (Society of Industrial and Office Realtors) designation.
New Faces
Kelcey McKean
Kelcey McKean has joined Colliers as a new associate in the Retail Sales and Leasing division. Kelcey is a 2007 graduate of the University of St. Thomas, where she received her B.S. in Real Estate Studies. She was actively involved as secretary of the Student Real Estate Society, and was a presenter for St. Thomas’ winning NAIOP University Challenge team. From 2006 to 2007, Kelcey conducted an internship with Colliers in the research department, gathering data and reporting on market information. Kelcey teams with Andrea Christenson, SCLS, and serves clients such as Panchero’s, The Carlyle, Hamburger Mary’s and Jimmy John’s.
Updates
Brokerage – Recent Transactions
(MEMPHIS, TN) Joe T. Turner represented Uni-Select in the sale of a 92,000 square foot industrial building, located at 633-641 Phelan, valued at $1.75 million to United Trust Fund, Inc. This transaction was part of a Colliers network multi-city assignment.
718 Washington Avenue South
(MINNEAPOLIS, MN) Larry Chevalier, SIOR and Brian Woolsey represented Birchstone Properties, LLC in the purchase of a 15,000 SF of office condominium located in 718 Washington Avenue South, valued at $2.06 million to Master Development.
605 Waterford
(PLYMOUTH, MN) Kai Thomsen and Julie Yeazle represented Wayzata-based US Energy Services in leasing 30,561 SF of space on the top two floors at 605 Waterford.
