Please enjoy our December edition of E-News.

Whew! I know, this is not much of a technical description, but it is the best word I could come up with to describe our year. Needless to say, it has been a busy year full of highlights, change, and – yes – a few challenges. Through it all I am extremely pleased with the growth of our company over the last three years. This growth can be attributed to numerous factors, but can be summed up as a lot of hard work by our teams and a number of new relationships in our institutional, corporate and entrepreneurial sectors. We are committed to being the very best service provider the Twin Cities and surrounding region has to offer.

As the holidays arrive, we especially want to thank you for your trust in us! We commit to never taking this for granted, continuing to work to strengthen relationships, providing greater financial results for you and your companies. We wish you and your families the best of holidays.

Warm Regards,
Jeff LaFavre, CCIM, MCR, SIOR

January, 2008

Research

Office in 2007

• Demand for office space remained relatively steady with declining vacancy and positive absorption
• Limited new spec construction completed in 2007
• Minnesota's unemployment rate climbed above the national average for the first time in 25 years
• Due to limited large blocks of space and no new construction in the near future, large tenants in the CBD are renewing early
• Office building sales slowed, but still reflected a strong showing in 2007

Office in 2008

• New construction will drive vacancy rates higher
• Companies that grew rapidly when there was no space available will be able to consolidate space as previously limited large blocks of space become available
• Companies will continue to right-size, limiting expansion until the economic worries have been addressed
• Cap rates will rise—especially for leveraged buyers—and there is still plenty of unleveraged capital in the market
• Inventory of large blocks of sublease space will increase, especially in the Southwest metro

Industrial in 2007

• Large number of investment sales
• Manufacturing jobs continued to decline
• Many users are in “wait and see” mode as the economy continues to fluctuate
• Plenty of new spec construction in the northern markets
• Most deals were done at either less than 30,000 SF or over 60,000 SF, limited amounts in the mid-range

Industrial in 2008

• Spec construction will continue to remain strong, especially in the Northeastern and Northwestern markets
• Activity will remain high, but deals will take longer to close
• Tenants may seek shorter term renewals until the economic uncertainty clears up
• Users remain skittish with the unknowns surrounding the election year and possible nationwide negative fallout from the housing/mortgage crisis
• Lowering land prices may stimulate development and build-to-suit activity

FEATURED DIVISION

Appraisal

Colliers Turley Martin Tucker Appraisers are qualified to provide you with comprehensive valuation and consultation services, valuable to a wide range of industries. We provide detailed, accurate, up-to-the-minute appraisals that are beneficial tools for your unique circumstances.

Our expertise extends to virtually every aspect of commercial real estate.

• Highest and best use, or feasibility studies
• Sale and lease arbitration
• Independent Market Valuations for Sarbanes-Oxley (financial reporting)
• Financing and loan collateral evaluation
• Sale/Leaseback analysis
• Partial interest valuation
• Property tax appeals
• Cash flow analysis
• Insurance valuation
• Litigation support
• Portfolio valuation
• Acquisition/Disposition consulting

Our Appraisal experts provide you with:

• An extensive database, tied directly to our brokerage and property management divisions, which keeps us up-to-date on current market activity
• A credible, independent opinion of value
• State-of-the-art research
• Expert witness testimony in trials, municipal meetings, or condemnation hearings
• A global appraisal network
• MAI designees, backed by the Appraisal Institute

With our help, you can make an informed decision regarding your commercial real estate that is based on an accurate and independent analysis of current market conditions. We provide services to clients such as corporations, financial institutions, government agencies, public sector entities, developers, and investors.

For information on how Colliers' Appraisers can meet your real estate needs, contact the Appraisal team. Dan Boris, Al Leirness, Christy Mackaman, Scott Neu or Rodger Skare.

NEW FACES

Angela Langenbrunner

Angela Langenbrunner has joined Colliers as an associate in the Retail Sales & Leasing division. Langenbrunner will work with Nancy Frykman and Dawn Grant, CCIM, CPM, RPA on leasing of the North Branch Outlets and with Molly Townsend on a number of additional retail projects.

Prior to joining Colliers, Langenbrunner was a real estate renewal representative with Regis Corporation, where she managed the company’s existing real estate portfolio in a 21-state region. Her prior experience also includes working as a salon coordinator for Regis and a retail sales associate for La-Z-Boy Furniture Gallery. Langenbrunner earned both a Bachelor of Arts degree and a Bachelor of Business Administration degree from the University of Minnesota Duluth. She is a member of the International Council of Shopping Centers sits on the program planning committee of ICSC Next Generation.

COMPLETED TRANSACTIONS

Colliers Represents Jay Lou in Office Sale

(Minneapolis, MN) The Investment Services team of Shawn Moore Mark Kolsrud, CPM, and Matt Klein, represented Jay Lou in the sale of 19,451 SF medical office building valued at $3.3 million to Elmer Enterprises, LLC.

Triple Net Leases Expansion Space

(Minneapolis, MN) Peter Dufour, CCIM, Vice President in the Office Sales and leasing division, represented Triple Net Properties Realty, Inc. in the lease expansion of Summit Orthopedics, Ltd. by 10,641 SF at the Gallery Professional located at 17 W Exchange Street Ste 300 valued at $1.9 million.

Rebuild Resources Sells Treatment Facility

(Blaine, MN) David M. Stokes, SIOR and Marty Wolske of the Industrial Sales and Leasing division, represented Rebuild Resources in the sale of a two-building, 20 acre treatment/counseling facility valued at $1.8 million to Volunteers of America.

Donald Tyler Enterprises Sells Ind. Space

(Minneapolis, MN) Ron Scholder, SIOR, Vice President of the Industrial Sales and Leasing division, represented Donald Tyler Enterprises, LLC in the purchase of a 27,000 SF building located at 8711 Bass Lake Road valued at $1.6 million to Brinker Properties.

Strandware Sells Eau Claire Facility

(Eau Claire, WI) Joe Turner and David M. Stokes, SIOR represented Strandware in the sale of a 42,300 SF office building located at 1529 Continental Drive valued at $2.2 million to Great Lakes Educational Loan Services.

NEW ASSIGNMENTS

North Branch Outlets

Colliers has been hired as the property management and leasing firm representing the owners of Tanger Outlet Center, the popular manufacturer outlet mall in North Branch, which is changing its name to North Branch Outlets effective January 1, 2008.

Colliers’ Dean Freeman, CCIM, CPM, senior vice president of Investor Services, will oversee management of the center, with Sharon Gallagher, senior property manager, and her team joining Colliers and continuing to serve as on-site management. Colliers’ Dawn Grant, CCIM, CPM, RPA, senior vice president; Nancy Frykman, second vice president of Retail Sales and Leasing; and new associate, Angela Langenbrunner, will represent the owners as the leasing team.

“Colliers is well known for its expertise in retail leasing and management,” said Gallagher. “We’re excited to partner with Colliers to ensure our center remains a high-traffic retail destination offering the best deals for consumers.”

The outlet center, located along I-25 and Highway 95 in North Branch, was built by Greensboro, N.C.-based Tanger Outlet Centers, Inc. in September of 1992 and opened with 21 tenants. Phase II, which opened in 1993, brought nine additional brand name manufacturer outlets to North Branch. Today, visitors to the center can buy direct from more than 30 manufacturers to save 20 to 70 percent off retail pricing. Current tenants include Old Navy, GAP, Dress Barn, Maurice’s, Nike, and more.

Landmark Tower

Colliers has been retained by the Minneapolis office of international real estate firm Hines to secure tenants for a nine- building, 766,240 square foot office/technology portfolio Hines REIT recently acquired from First Industrial REIT and CalSTERs. This is the first office/technology portfolio purchased by Hines REIT.

“Hines is a highly respected real estate firm recognized worldwide for its market savvy and asset valuation,” said Jeffrey LaFavre, CCIM, MCR, SIOR, managing principal with Colliers’ Minneapolis office. “This is a significant assignment for Colliers, and we look forward to working with Hines as they enter this new product category.”

LaFavre added that the Hines assignment represents one of more than 13 new institutional clients Colliers has secured in the last 15 months. “Our ability to win this assignment demonstrates that Colliers has the experience and the knowledge institutional clients require.”

The Colliers leasing team for this assignment includes Dennis McClinton, CCIM, SIOR, senior vice president and principal; David Stokes, SIOR, vice president; Duane Poppe, CCIM, Martin Wolfe and Kai Thomsen, senior associates; and William Leaf, Jeffrey Pearson, and Marty Wolske, associates in Colliers’ Industrial & Office Brokerage Divisions.

Hines Office Tech Portfolio

Colliers has been retained by the Minneapolis office of international real estate firm Hines to secure tenants for a nine- building, 766,240 square foot office/technology portfolio Hines REIT recently acquired from First Industrial REIT and CalSTERs. This is the first office/technology portfolio purchased by Hines REIT.

“Hines is a highly respected real estate firm recognized worldwide for its market savvy and asset valuation,” said Jeffrey LaFavre, CCIM, MCR, SIOR, managing principal with Colliers’ Minneapolis office. “This is a significant assignment for Colliers, and we look forward to working with Hines as they enter this new product category.”

LaFavre added that the Hines assignment represents one of more than 13 new institutional clients Colliers has secured in the last 15 months. “Our ability to win this assignment demonstrates that Colliers has the experience and the knowledge institutional clients require.”

The Colliers leasing team for this assignment includes Dennis McClinton, CCIM, SIOR, senior vice president and principal; David Stokes, SIOR, vice president; Duane Poppe, CCIM, Martin Wolfe and Kai Thomsen, senior associates; and William Leaf, Jeffrey Pearson, and Marty Wolske, associates in Colliers’ Industrial & Office Brokerage Divisions.