By David Stokes and Chris Weirens, Industrial Brokers
The Twin Cities industrial market has been among the strongest drivers of commercial real estate growth in the most recent economic cycle.
In fact, since the beginning of 2011, nearly 15 million square feet (sf) of multitenant industrial space has been absorbed throughout the Minneapolis-St. Paul market, according to Cushman & Wakefield’s Compass report. That number – which doesn’t include the several massive, recent build-to-suit projects accommodating only one tenant – makes up more than 14 percent of today’s multitenant universe.
With growth continuing at a frenzied pace, and the fight for labor getting more intense than ever, leasing has become competitive for both landlords and the companies using space. So what factors are attracting users to the most successful properties, and how can landlords leverage those factors?
This is part one of a blog series digging into recent trends in occupier decision-making.
Factor One: Location is still huge
Stop us if you’ve heard this one before: Location, location, location.
For many reasons, some industrial users will start with a location or geographic area, and ask their representative brokers to go from there.
Why a draw to one particular city or part of the metro? Reasons vary. For some, access to skilled but low-cost labor is the most important factor there could be. In Minneapolis-St. Paul, that attracts more users to the core of the metro, to such developments as Northern Stacks in Fridley or one of the many industrial properties in the Midway area of Minneapolis and St. Paul.
The Northwest submarket, with flexibility in Brooklyn Park, Maple Grove and Rogers in particular, also offer both proximity to a strong labor force and proximity to executive housing in more affluent cities such as Plymouth and Minnetonka.
For other companies, the need to be close-in is driven by customers. For example, a manufacturer or distributor which delivers the majority of its product to markets in the Twin Cities may prefer to locate centrally to cut costs. Perhaps the company’s customers are all in St. Paul, or maybe they’re in both Brooklyn Park and White Bear Lake. In either case, locating near the core to save on shipping costs is a motivator.
If first-ring locations aren’t possible or feasible for the user, they’ll start to look a little farther away from their employee base, but as close to the core as possible.
David Stokes and Chris Weirens are industrial brokers in Cushman & Wakefield’s Minneapolis- St. Paul office. The two specialize in buyer and seller representation, tenant representation, landlord representation and strategic advisory services and practice primarily in the Northeast Twin Cities market, which includes parts of Minneapolis, St. Paul and several notable suburbs. Visit their team site at http://mspindustrial.com.