MNCAR Annual Market Report 2010

8/14/2019 MNCAR Annual Market Report 2010

1/16

A n n u a l M a r k e t R e p o r t

Minnesota Commercial Association of REALTORS

www.mncar.org

2010


2/16

Were happy to make our MNCAR Annual Market Report available for the fourth

consecutive year. Data was provided by the MNCAR Exchange and reviewed for

accuracy by the industry experts listed below. We hope it provides you with another tool

to better serve your clients and stay informed on the state of the market.

- Dara Rudick, Executive Director

2010 MNCARAnnual Market Report

Special thanks to the following MNCAR Market Experts for volunteering to review market data:

INDUSTRIAL

OFFICE

RETAIL

Tim IgoSuntide

Commercial

Skip MelinCushman &Wakefield

Andy McConvilleCB Richard Ellis

Tricia PitchfordNorthMarq

Jen HelmNorthMarq

Suzie RettingerCBC Griffin

Larissa ChampeauNorthMarq

Matt DelisleWelsh Companies

Anna CoskranNelson, Tietz,

& Hoye

Brian HelmkenCB Richard Ellis

Bryan BeltrandWelsh Companies

Tom StellaNorthMarq

John McCarthyNorthMarq

Duane PoppeColliers

Tom SullivanNorthMarq

Aaron SillanpaWelsh Companies

Ryan BartleyCB Richard Ellis


3/16

Annual Office Market Report

SaleListings

BUILDING SIZE 0-10,000 SF 10-25,000 SF 25-50,000 SF 50-100,000 SF 100,000+ SF2008 2009 2008 2009 2008 2009 2008 2009 2008 2009

Minneapolis CBDSoutheastSouthwestSt. Paul CBDSt. Paul SuburbanWest and NorthwestTOTALS

LeaseListings

CONTIGUOUS SF 0-10,000 SF 10-25,000 SF 25-50,000 SF 50-100,000 SF 100,000+ SF2008 2009 2008 2009 2008 2009 2008 2009 2008 2009

Minneapolis CBDSoutheastSouthwestSt. Paul CBDSt. Paul SuburbanWest and NorthwestTOTALS

AVAILABLE BUILDING INVENTORY SALE & LEASENumber of Listings by Submarket

NOTABLE DEVELOPMENTS

SquareFeet

Mpls CBD SE SW SP CBD SPSuburban

0

(100,000)

(200,000)

(300,000)

(400,000)

(500,000)

(600,000)

W & NW

%V

acant

25

20

15

10

5

0

(202,470)(206,481)

(62,367)

(241,304)

(275,952)

16.9

15.9

20.322.424.3

16.2

(448,890)

VACANCY RATES AND ABSORPTION BY SUBMARKET

NAME CITY SQ. FOOTAGE LISTING COMPANY STATUS

Joffe Corporate Office Building Minneapolis 170,000 NAI Welsh U/COakdale Business Center 5 Oakdale 40,000 Stiglich Construction, Inc U/CThe Offices at West End Saint Louis Park 33,000 NorthMarq U/CKenyon Crossings Lakeville 25,000 EFH Realty Advisors U/C

237333

6183

219

236384

6892

240

728163

3650

140

938213

4742

160

55

170

131555

67

2006

1352

045416

20

142249

22

3011139

4100229

18221530455

296378

1430

17622432655

290374

1445

805187187779

392

8057

102207686

421

302744102940

180

282843102534

168

1414205

181990

1713216

172498

57939

1245

86858

1247


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%Vacant

Mpls CBD SE SW SP CBD SP

Suburban

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0

W & NW

13.3

12.0

31.3

23.4

25.9

25.7

16.4

15.7

13.2

17.9

17.2

14.1

11.6

21.3

16.4

23.6

24.5

Class A Class B Class C

14.8

VACANCY RATES BY SUBMARKET

RentalRate(

$)

Class A Class B

20

15

10

5

0

Class C

16.00

2008 2009

15.60

12.0711.72

12.72 12.35

AVERAGE QUOTED NET RENTAL RATES BY CLASS


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Avg QuotedTotal Universe SF Vacant SF % Vacant Net Absorption SF Rate ($) Avg Op Exp/SF Avg Taxes/SF

MARKET 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009

Mpls CBDClass AClass BClass CTotals

SoutheastClass AClass BClass CTotals

SouthwestClass AClass BClass CTotals

St. Paul CBDClass AClass BClass CTotals

St. Paul SuburbanClass A

Class BClass CTotals

West & NorthwestClass AClass BClass CTotals

TOTAL MARKETClass AClass BClass C

TOTALS

2009 MARKET OVERVIEW

13,698,2848,014,5297,105,431

28,818,244

2,460,6892,641,8951,232,3706,334,954

8,387,2205,481,7031,262,178

15,131,101

2,301,0454,425,743

465,6317,192,419

1,367,125

3,789,0611,458,5426,614,728

4,932,0285,333,0761,760,748

12,025,852

33,146,39129,686,00713,284,900

76,117,298

1,382,3791,276,2371,313,5223,972,138

376,060471,977239,560

1,087,597

1,340,367752,287309,627

2,402,281

232,5081,446,130

72,7871,751,425

236,119

303,135206,659745,913

334,838817,236322,460

1,474,534

3,902,2715,067,0022,464,615

11,433,888

1,827,4331,890,5511,163,5064,881,490

770,556618,507147,424

1,536,487

2,156,519899,579327,000

3,383,098

303,9811,082,744

72,9971,459,722

235,313

558,887260,3751,054,575

570,5771,134,121

248,5871,953,285

5,864,3796,184,3892,219,889

14,268,657

10.816.818.414.4

15.518.119.417.3

17.713.825.916.9

9.630.89.4

22.2

19.7

8.414.712.0

7.016.918.313.0

12.517.618.2

15.5

13.323.616.416.9

31.323.412.024.3

25.716.425.922.4

13.224.515.720.3

17.2

14.817.915.9

11.621.314.116.2

17.720.816.7

18.7

128,704166,732(43,955)251,481

61,126(114,671)(50,061)

(103,606)

38,139(51,444)

10,911(2,394)

115,984(35,070)

(77)80,837

(29,549)

(77,216)(71,396)(178,161)

10,90764,266

(105,304)(30,131)

325,311(47,403)

(259,882)

18,026

(190,733)(170,726)

158,989(202,470)

(394,496)(146,530)

92,136(448,890)

(46,862)(117,666)(41,953)

(206,481)

(137,189)76,032(1,210)

(62,367)

55,356

(271,944)(24,716)(241,304)

(213,643)(136,182)

73,873(275,952)

(927,567)(767,016)

257,119

(1,437,464)

16.6813.7312.2813.51

14.7612.3811.0412.77

16.0012.5410.9813.34

12.512.1410.1311.92

15.82

12.3628.0513.57

17.7912.9712.9114.11

16.0012.7212.07

13.41

15.2711.2211.4512.05

14.4016.2110.7114.33

16.1011.9110.7013.19

12.9310.5010.2610.86

14.77

11.7714.0212.99

17.2512.5812.7813.82

15.6012.3511.72

13.04

7.467.886.227.15

6.295.834.985.82

7.577.326.567.26

8.756.435.337.10

5.87

6.475.236.15

7.746.716.526.93

7.216.876.11

6.80

7.757.746.517.23

6.845.505.595.93

7.537.486.557.36

9.397.565.057.74

5.85

6.265.836.10

7.776.856.647.04

7.316.896.34

6.89

4.682.501.872.78

3.202.681.922.72

4.282.882.463.33

2.952.60

2.73

3.55

2.981.903.03

4.683.382.463.54

4.072.942.15

3.13

5.152.902.293.16

3.743.072.473.15

4.493.222.503.64

5.652.23

2.99

3.69

3.011.713.14

4.403.582.523.60

4.373.122.37

3.36


6/16


GROUND RULES

This report covers only pure, multi-tenant office buildings in excess of 20,000 square feet. It therefore does not includemedical office buildings, or buildings containing solely government offices.

Properties that were designed to be multi-tenant are included in this report even if they have been leased entirely toone tenant. Single tenant leased properties that were developed on a build-to-suit basis, and that would not functionwell as multi-tenant properties, are not included in this report. Owner occupied properties are also not included in thisreport.

Rental rates are based on quoted net rates. Actual effective rates will vary. Sale listing counts include individual condo units as single listings. For instance, a 50,000 square foot building divided into

five 10,000 square foot condos, each with a separate For Sale listing, would contribute 5 listings to our listing count totals

DEFINITIONS

Existing Projects: Building construction completed prior to December 31st, 2009. Vacant space: Space that is unoccupied and not under lease. Absorption: The positive or negative difference in the amount of space occupied between December 31st, 2008 and

December 31st, 2009. Space that is physically occupied by a tenant prior to December 31st, 2009, but marketed for lease is considered

occupied space. Sublease space, either physically occupied or vacant, is considered occupied space in the universe until the lease

runs out. Space occupied by a tenant on a month-to-month lease that is also marketed for lease to a new, long-term tenant is

considered occupied space. The report does not track shadow space, or buildings that are leased by tenants who are not using the space but not

trying to sublease it. Contiguous space: Having a common boundary; space that is directly adjacent to another space or spaces. Average quoted rates were based on single, double, and triple net rates.


7/16

Annual Industrial Market Report

AVAILABLE BUILDING INVENTORY SALE & LEASENumber of Listings by Submarket

SquareFeet

0

(200,000)

(400,000)

(600,000)

(800,000)

(1,000,000)

(1,200,000)

%V

acant

20

15

10

5

0

East Northwest

(831,513)

Southeast

(378,390)

Southwest

(516,030)11.311.4

18.1

15.2

Northeast

(1,102,118)

12.4

(75,666)

VACANCY RATES AND ABSORPTION BY SUBMARKET

SaleListings

BUILDING SIZE 0-25,000 SF 25-50,000 SF 50-100,000 SF 100-200,000 SF 200,000+ SF2008 2009 2008 2009 2008 2009 2008 2009 2008 2009

EastNortheastNorthwestSoutheastSouthwestTOTALS

LeaseListings

CONTIGUOUS SF 0-25,000 SF 25-50,000 SF 50-100,000 SF 100-200,000 SF 200,000+ SF2008 2009 2008 2009 2008 2009 2008 2009 2008 2009

EastNortheastNorthwestSoutheastSouthwestTOTALS


NAME CITY SQ. FOOTAGE DEVELOPER STATUS

Nordic Ware Expansion St. Louis Park 80,000 Greiner Construction, Inc. CompletedMinnesota Forklift Bloomington 64,000 Ryan Companies US, Inc. CompletedInsulations Distributors Chanhassen 50,000 N/A CompletedBituminous Roadways Mendota Heights 20,000 United Properties Under Construction

3080661828

222

31109923038

300

1425371817

111

1433532620

146

917246

1369

820279

1882

18576

27

07

11108

36

13144

13

12153

12

72242218170229931

77294280190250

1091

1760574359

236

2475

1036082

344

1324332931

130

1533422947

166

51212138

50

81421129

64

14355

18

13553

17


8/16


%Vacant

East Northeast Northwest Southeast Southwest

30.0

25.0

20.0

15.0

10.0

5.0

0.0

12.5

12.9

11.2 1

2.7

11.5

7.8

13.7

17.9

11.8

10.31

2.3

11.1

25.7

15.7

Bulk Warehouse Office Showroom Office Warehouse

16.4

VACANCY RATES BY SUBMARKET AND PRODUCT TYPE

RentalRate($)

Bulk Warehouse Office Showroom

10

8

6

4

2

0

Office Warehouse

7.86

2008 2009

Office

Warehouse

Office

Warehouse

4.70

7.75

4.34

9.62

Office

Warehouse

Office

Warehouse

5.76

9.81

5.41

8.79

Office

Warehouse

Office

Warehouse

5.14

8.39

4.77

AVERAGE QUOTED NET RENTAL RATES BY PRODUCT TYPE


9/16


Total Avg Quoted Avg OpUniverse SF Vacant SF % Vacant Net Absorption SF Rate ($) Exp/SF Avg Taxes/SF

MARKET 2009 2008 2009 2008 2009 2008 2009 2008 2008 2009 2009 2008 2009 2008 2009WH Off WH Off


EastBulk WarehouseOffice ShowroomOffice WarehouseTotals

NortheastBulk WarehouseOffice ShowroomOffice WarehouseTotals

NorthwestBulk WarehouseOffice ShowroomOffice WarehouseTotals

SoutheastBulk WarehouseOffice ShowroomOffice WarehouseTotals

SouthwestBulk WarehouseOffice ShowroomOffice WarehouseTotals

TOTAL MARKETBulk WarehouseOffice ShowroomOffice Warehouse

TOTALS

3,121,5261,846,6722,803,5757,771,773

8,620,4924,127,723

20,694,38833,442,603

10,752,9844,848,050

13,802,46429,403,498

7,660,8284,090,6947,014,744

18,766,266

4,456,2846,408,838

12,840,57423,705,696

34,612,11421,321,97757,155,745

113,089,836

367,306226,873287,486881,665

1,115,263462,178

2,585,1794,162,620

1,234,665377,708

1,748,5993,360,972

1,967,450643,426780,534

3,391,410

799,2471,048,2021,758,9553,606,404

5,483,9312,758,3877,160,753

15,403,071

358,514328,771118,714805,999

591,342620,848

1,882,5673,094,757

795,264396,834

1,265,4702,457,568

1,174,269616,815635,900

2,426,984

384,681899,934

1,534,3722,818,987

3,304,0702,863,2025,437,023

11,604,295

(8,792)101,898

(168,772)(75,666)

(523,921)158,670

(736,867)(1,102,118)

(292,944)(114,909)(423,660)(831,513)

(303,713)52,284

(126,961)(378,390)

(313,148)(107,063)

(95,819)(516,030)

(1,442,518)90,880

(1,552,079)

(2,903,717)

(91,958)12,02020,246

(59,692)

122,916(253,628)

143,93713,225

167,090(108,477)(111,139)(52,526)

(278,545)26,603

(109,317)(361,259)

30,115(265,785)(247,303)(482,973)

(50,382)(589,267)(303,576)

(943,225)

11.812.310.311.3

12.911.212.512.4

11.57.8

12.711.4

25.715.711.118.1

17.916.413.715.2

15.812.912.5

13.6

11.217.84.2

10.3

6.615.09.19.2

7.57.99.58.5

17.115.39.3

13.7

10.014.212.012.3

9.913.4

9.6

10.4

4.676.565.635.88

5.125.455.195.25

4.956.154.845.20

4.185.704.925.20

4.155.435.405.32

4.705.765.14

5.29

5.959.866.898.07

7.539.038.078.23

8.3712.458.589.47

7.798.547.858.11

7.129.459.089.00

7.759.818.39

8.71

4.287.054.835.70

4.355.324.724.81

4.535.514.474.74

4.134.904.654.63

4.235.435.205.18

4.345.414.77

4.89

0.682.411.531.73

1.081.512.291.98

1.2611.36

1.754.01

4.422.183.483.18

1.372.241.741.88

2.034.042.18

2.72

1.092.481.942.03

1.501.831.311.48

1.291.971.721.70

1.002.141.541.78

1.152.241.962.00

1.232.091.64

1.74

1.341.671.561.55

1.442.221.471.63

1.552.451.831.93

1.182.001.621.66

1.022.031.771.79

1.352.141.66

1.75

1.191.641.441.50

1.422.091.391.58

1.522.271.631.80

1.191.831.621.65

1.202.101.691.80

1.362.031.56

1.70

6.7410.348.929.16

8.009.368.198.48

8.809.859.029.19

7.329.378.738.85

6.599.629.239.17

7.869.628.79

8.95


10/16


GROUND RULES Multi-tenant office warehouse, office showroom, and bulk warehouse buildings in excess of 25,000 square feet. Single-

tenant leased properties that were developed on a build-to-suit basis, and that would not function well as multi-tenantproperties, are not included in this report. Owner occupied properties are also not included.

Rental rates are based on quoted net rates exclusive of transaction costs. Actual effective rates will vary.

DEFINITIONS




runs out. Space occupied by a tenant on a month-to-month lease that is also marketed for lease to a new, long-term tenant is

considered occupied space.

The report does not track shadow space, or buildings that are leased by tenants who are not using the space but nottrying to sublease it. Contiguous space: Having a common boundary; space that is directly adjacent to another space or spaces. Average quoted rates were based on single, double, or triple net rates.

PROFILE OF PROJECT TYPES

Project Type Typical Tenant Size Clear Height Bay Depth Office/ShowroomOffice Warehouse 7,000 Sq. Ft. + 16-24 Ft. 120-160 Ft. 10%-40%Office Showroom 3,000 Sq. Ft. + 12-16 Ft. 80-120 Ft. 25%-75%Bulk Warehouse 20,000 Sq. Ft. + 20+ Ft. 160-200 Ft. 0%-10%


11/16

Annual Retail Market Report

SaleListings

CENTER TYPE Neighborhood Centers Community Centers Regional Centers Downtown Retail 2008 2009 2008 2009 2008 2009 2008 2009

36 49 12 20 2 3 0 7

AVAILABLE BUILDING INVENTORY SALE & LEASE

Number of Listings by Center Type

SquareFeet

2,400,000

2,200,000

2,000,000

1,800,000

1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

%V

acant

40

35

30

25

20

15

10

5

0

CBDs Neighborhood RegionalCommunity

498,798

2,324,637

1,298,997

36.7

10.4

6.0

1,411,148

8.2

VACANCY BY CENTER TYPE

LeaseListings

CONTIGUOUS SF 0-10,000 SF 10-25,000 SF 25-50,000 SF 50-100,000 SF 100,000+ SF

2008 2009 2008 2009 2008 2009 2008 2009 2008 2009

Neighborhood Centers 288 308 56 57 17 15 3 0 1 0Community Centers 69 68 32 23 15 10 8 6 2 2Regional Centers 15 17 6 7 3 5 0 0 0 0Downtown Centers 8 45 3 14 0 4 0 1 0 1


NAME CITY SQ. FOOTAGE LISTING COMPANY CONSTRUCTION STATUS

The Grove Maple Grove 550,000 Welsh Companies U/CThe Fountains of Arbor Lakes Maple Grove 492,349 NorthMarq U/CArgenta Hills Inver Grove Heights 380,000 Welsh Companies U/CWaters Edge at Pine Lakes Sartell 100,000 Meyer Commercial U/C

These counts include listed properties on the MNCAR Exchange within the seven-county area and uses the Center Typesassigned to properties there. These do not match the center types used for generating vacancy and rate statistics in all cases.


12/16


Expenses($)

15.0

10.0

5.0

0.0

10.26

CBDs Community

3.37

Neighborhood

3.33

Regional

4.75

AVERAGE TOTAL EXPENSES BY CENTER TYPE

RentalRate(

$)

30

20

10

0

CBDs

21.00

Neighborhood

16.70

Community

18.33

Regional

24.95

QUOTED NET RENTAL RATES BY CENTER TYPE


13/16



These figures do not take sublease and shadow space into account.

Avg QuotedTotal Universe SF Vacant SF % Vacant Rate ($) Avg Op Exp/SF Avg Taxes/SF

MARKET 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009

CBDs

CommunityNeighborhood

Regional

TOTAL MARKET

1,357,746

17,240,145

22,352,883

21,681,191

62,631,965

1,291,746

18,991,405

21,566,616

20,205,646

62,485,413

498,798

1,411,148

2,324,637

1,298,997

5,533,580

252,894

1,140,353

1,950,038

1,070,421

4,413,706

19.6

6.0

9.0

5.3

7.1

36.7

8.2

10.4

6.0

8.8

23.07

19.08

16.41

36.50

18.92

21.00

18.33

16.70

24.95

17.44

10.83

3.14

3.34

7.00

3.82

10.26

3.37

3.33

4.75

3.70

3.74

4.09

3.46

7.35

3.92

4.23

4.24

3.73

5.09

3.91


14/16


GROUND RULES

Multi-tenant retail properties in the 7-county metro area in excess of 30,000 square feet. Rental rates are based on quoted net rates exclusive of transaction costs. Actual effective rates will vary.

DEFINITIONS




runs out.

Space occupied by a tenant on a month-to-month lease that is also marketed for lease to a new, long-term tenant isconsidered occupied space.

The report does not track shadow space, or buildings that are leased by tenants who are not using the space but nottrying to sublease it.

Contiguous space: Having a common boundary; space that is directly adjacent to another space or spaces. Average quoted rates were based on single, double, or triple net rates.

PROFILE OF PROJECT TYPES

Regional Center: 400,000 square feet and upCommunity Center: 150,000-399,999 square feetNeighborhood Center: 30,000-149,999 square feet

Central Business Districts of Minneapolis & St. Paul: Regardless of square footage


15/16

MNCAR EXCHANGE 2010 LEADERSHIP

PRESIDENT Sheila DeVine Warnert Commercial

PRESIDENT-ELECT Tim Igo Suntide Commercial

IMMEDIATEPAST PRESIDENT Jeff LaFavre Integrust Advisory Group

MNCAR PRESIDENT Nathan Arnold CB Richard Ellis

DIRECTORS Lisa Christianson Christianson & CompanyTony DelDotto NorthMarqMarty Fisher Premier Commercial PropertiesDirk Koentopf NorthMarqJohn McCarthy NorthMarqBill Ostlund CBC GriffinWhit Peyton CB Richard EllisMike Salmen TranswesternSteve Shepherd Welsh Companies

Bill Wardwell Welsh Companies

MINNESOTA COMMERCIAL ASSOCIATION OF REALTORS 2010 LEADERSHIP

PRESIDENT Nathan Arnold CB Richard Ellis

PRESIDENT-ELECT Brad Butler Liberty Property Trust

IMMEDIATEPAST PRESIDENT Tony DelDotto NorthMarq

DIRECTORS Bryan Beltrand Welsh CompaniesTom Burton Burton Real Estate AdvisorsJason Butterfield Cushman & WakefieldAnna Coskran Nelson, Tietz & HoyeMike Honsa TranswesternNorma Jaeger ColliersGreg McMillan NorthMarq

Stefanie Meyer NorthMarqDuane Poppe ColliersPhil Simonet Paramount Real Estate CorporationTom Tracy NorthMarq

2009 Annual Market Report


16/16

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Documents

MNCAR Annual Market Report 2010