Please enjoy our May edition of E-News.

Our featured research story this month focuses on the Manufacturing market.

As we've all heard, Minnesota has always been a great place to start a business, and the April 2008 issue of Fortune Small Business agrees, ranking three Minnesota cities among the top 100 places to start a business. Minnesota also set a state record of $4.3 billion in the fourth quarter for exports, despite having fewer manufacturing jobs than in the past.

We are pleased to have the opportunity to share our research and market information with you. As a company, we commit our time and resources to gathering data and sharing our knowledge with you, our valued clients and friends.

Warm Regards,
Jeff LaFavre, CCIM, MCR, SIOR

The State of Manufacturing in Minnesota

By Dennis McClinton, SIOR, CCIM and William Leaf, Colliers' Southwest Industrial Team, and Jim Mayland - Research Manager

Minnesota has long been known as a great place to start a business, as evidenced by the many Fortune 500 companies that got their start here. Now, Fortune Small Business Magazine agrees. Recently, the magazine identified three Minnesota cities, including Minneapolis, Rochester, and St. Cloud, as among the top 100 places to start a business. The report looked at economic conditions, start-up activity, physical beauty of the location, and cultural amenities such as museums and universities. Despite this favorable ranking, however, Minnesota was also ranked in the "10 Worst States for Starting a Business" by CNNMoney.com.

Even if Minnesota cities are considered a great place to start a business, the question then remains, "Can we keep the businesses we have going forward?" There are some ominous signs out there that may make it difficult to do so. For example:

• Manufacturing orders, production rates, and overall business conditions rose in March for the Midwest states but fell nationwide. Unfortunately, Minnesota followed the national average and not the Midwest's.
• Residential real estate taxes continue to lag. In an election year, it is tough for legislators to tax households that already hold a voting right, so this could be a sign that commercial and industrial properties will be hit with higher taxes to compensate, as referenced in a recent Star Tribune article.
• The JOBZ program, which provides tax breaks to companies that create jobs in rural Minnesota, is under attack from the Senate Tax Committee, which thinks the program should be curtailed and not expanded.

In the month of March:

• 3M announced it will be moving its optical division headquarters from Maplewood to Hong Kong.
• Medtronic announced it will cut costs over the next five years by consolidating factories and shifting manufacturing to countries like Mexico.
• Spartech Corporation, a maker of thermoplastic products, said it will shut down the Mankato facility and consolidate operations in other states, costing the area 350 jobs.

Not all news about the devaluation of the dollar has had negative affects on Minnesota. For one, the state set a record of $4.3 billion in the fourth quarter for exports, despite having fewer manufacturing jobs than in the past...

Click here for the full article

Click here for the Colliers USA First Quarter Industrial Report

The Twin Cities office of Colliers Turley Martin Tucker has seen many changes over the past few years. The management portfolio has grown from 4 to 7 million square feet, our brokerage teams have grown in numbers and experience, and our client roster has come to include some of the country's strongest investors.

Colliers' real estate management professionals are equipped with the experience, information systems, and processes to enhance your investment.

We ensure the value of your investments by providing:

• Efficient and effective solutions that fit your short- and long-term goals
  
• Tenant retention strategies
  
• Lease administration and negotiations
  
• Operating expense analysis and benchmarking
  
• On-site engineering and maintenance personnel
  
• Accounting and financial reporting
  
• Utility management and analysis
  
• Construction, design, and move management
  
• Assistance with government and regulatory issues
  
• Increased purchasing power through our volume buying of supplies and contract services

For an Investor Services Update - Click Here

Colliers Sells Industrial
Portfolio Buildings

Minneapolis, MN

The Investment Sales team of Mark Kolsrud, CPM, Matthew Klein, Shawn Moore, and Pia Robertson has completed two significant investment sales assignments.

The first sale involved two properties located at the Normandale Tech Center at 6403 and 6507 Cecilia Drive in Bloomington, totaling 161,368-square feet. The second sale involved two properties located at 770 and 800 Kasota in Minneapolis, totaling 318,006-square feet.

Though the investment market has changed since mid-2007, the Bloomington buildings, for example, closed within 60 days of listing the project, and all four properties had several interested parties,” said Kolsrud, a senior vice president and principal with Colliers.

The team remains bullish on the market and state that they are still seeing a strong level of activity in the market.

Contact Mark, Matt, or Shawn for information.

Colliers Represents Buffalo
Wild Wings in $1.15 Million
Lease Agreement

Monticello, MN

Molly Townsend, associate in Colliers’ Retail Sales and Leasing division, represented Buffalo Wild Wings in the lease of 5,000-square feet of retail space from S.B. 22, LLC.  The leasing transaction is valued at $1.15 million.

Buffalo Wild Wings is currently the only tenant for this newly constructed building, located at Hwy. 25 and School Boulevard in Monticello, Minn. Unlike many other casual full-service restaurants, Buffalo Wild Wings has had a strong year and is continuing to grow.

“We have succeeded in opening the number of stores Buffalo Wild Wings wanted, but we are taking a careful approach to where we locate and when we lease,” said Townsend. “Buffalo Wild Wings is close to committing to several additional new locations that will open in 2008 and 2009.”

Contact Molly for information.

Colliers Represents Commercial Development Company in Industrial Lease Agreement

Minneapolis, MN

The Colliers team of Jeff Patterson, CRE, MCR, Mark Kolsrud, CPM, Matt Klein, and Shawn Moore represented Commercial Development Company in leasing 84,175-square feet of industrial space in River Road Industrial Center, located at 4800 East River Road, to Tube Technologies.

River Road Industrial Center is the largest industrial building in the State of Minnesota, with more than 2,000,000 SF under one roof.

Contact Jeff, Mark, Matt, or Shawn for information.

Colliers Minneapolis/St. Paul | E-News May, 2008 | We know The State of Real Estate®