Cushman & Wakefield’s Minneapolis-St. Paul office has released its January 2019 Compass Report, its biannual dive into the latest Twin Cities Commercial Real Estate trends and dynamics.
Details from the report, which is available at compass.cushwakemsp.com:
At the end of 2018, the market’s multitenant properties posted a vacancy rate of 10.9 percent, up slightly from the 10.6 percent rate posted six months prior.
A total of just over 1 million square feet (msf) was absorbed by occupiers throughout the office, industrial and retail property types in the second half of 2018, significantly more than what Cushman & Wakefield had projected for the six-month period. 2018 ended with 2.78 msf of absorption across those property types, the market’s best year for absorption since 2015. The industrial sector drove much of the activity with 2.78 msf absorption over the course of the year. Office saw 600,000 square feet (sf) of absorption, while retail saw negative absorption of the same amount.
New construction continued forward at a healthy pace, with 1.5 msf being built across all property types in the second half of the year. That brought the year-end construction completions to 2.1 msf, down slightly from the 2.5 msf delivered to the market in 2017. The pace is expected to continue into 2019, the first half of which will see approximately 1.5 msf of space delivered to the market, a number that doesn’t include single-tenant build-to-suit developments.
“We’ve seen a lot of changes in the commercial real estate industry during this record-breaking economic cycle, but occupiers and investors remain active across all property types in our market,” said Mike Ohmes, Managing Principal in the Minneapolis-St. Paul office of Cushman & Wakefield. “Our firm continues to project strong absorption in early 2019, and significant properties are under construction, signaling an encouraging start to this year.”