Nowhere did I say specifically this applies to the industry I work in, commercial real estate. What is different as a commercial real estate professional is that so many different aspects of business (finance, facilities, technology, human capital, marketing) involve real estate or because of our viewpoint to our client’s business we can offer value to our clients by connecting them with trusted resources.

Not unique? Not earth shattering insight? No, just further realization that a broker is a broker of more than just real estate. They are brokers of relationships and solutions in whatever shape they make. It’s just easier to get paid for the ones that involve real estate.

Moving into 2012, the signs continue to show our commercial real estate market is headed in a positive direction. The office market, while still muted in overall demand and challenged by unemployment, has its bright spots. Many companies are gaining confidence and their workplace strategies are evolving.

A few highlights in the market from the forthcoming Colliers 2011 Q4 Office Report:

The vacancy rate in the Twin Cities office market stands at 16.0% down from 16.6% in Q3. The strongest occupancy is along the 394 Corridor with Class A at 7.2%. Class A tenants in the Corridor with expirations coming up may want to analyze space utilization before resigning.

The Southwest office market vacancy rate stands at 16.6% with big investment sales at Two MarketPointe and the sale, sale/leaseback of the United Health former ADC Campus. Despite an uptick in small to mid-size groups looking, large blocks of vacancy still exist and will make SW a tenant’s market into near future.

The Minneapolis CBD’s vacancy rate is 13.1% with Nicollet Mall at near 5% compared to 17% for the rest of the Class A Office Market. Tower vacancy above the 25^th floor is under 3%. Slow and steady is predicted here but opportunities can still be found, especially with Class A subleases.

The St. Paul CBD’s vacancy stands at 20.9% and had negative absorption of 119,543 for 2011. 61% of the CBD inventory is Class B and much of it is older and functionally obsolete. Landlords will need to seek more progressive ideas and new adaptive reuse strategies to compete in attracting a new generation of tenants.

Airport-South of the River vacancy rate is 18.9% and the positive news in the submarket includes the announcement of a new 138,000 square foot data center that could create 100 technology jobs.

As companies renew and reshape their office space, places like third party retail or wholesale data centers are becoming an integral part of the real estate strategy. The traditional IT footprint is outsourced to an environment that better serves the enterprise and balance sheet.

Here at Colliers we are fortunate to have great leadership like Tim Huffman, Global Director of the Technology Solutions Group, advising on mission critical and disaster recovery facilities and assisting in establishing, assessing and locating data center or co-location requirements.  As a member of the Colliers TSG team, I am working with Tim to help bridge the gap between IT and real estate for our clients.

Please contact us if you have any questions or if we can assist you with any strategic real estate analysis.

All the best for a prosperous 2012!

Flickr photo cred: jfpalmer

Flikr photo cred: Mark McLaughlin

I started my version of the ‘commercial real estate trends for 2012′ post but found others out there with whom I agreed with (almost) completely. So I figured why not give these folks more props and I’ll save tips and taps for another post.

One is Coy Davidson, a colleague at Colliers International. Coy posts regularly on many CRE related topics and his 2012 list for corporate real estate exhibits both the influence of technology and new realities of the economy. Workplace solutions are showing further evidence the freelance nation has something to teach the corporate culture. As well as mobile devices and technology developments now putting teeth to the telecommute directives inspired to in Web 1.0.

The other is ULI’s Urbanland. In this case, they have a good post from Deloitte’s report on the macro trends affecting investment real estate. Foreign investment, patient development centered on the fundamentals and good ole’ cash will rule the day…again. Hope is that we keep this in mind before we get all bubbly over data center REITS or apartment projects. Although I think its too late for the latter.

Where do I think progressive CRE companies are going to address the workplace, economy and global markets of the future? They are going to the places these trends germinate, learn what makes them tick, make a select offering of strategies and services to address them and then wait for the masses to catch-up.

Me, I’m looking at these and the smart folks inside the organization for clues and resources for doing it all better, faster, more mobile and more conscientious for 2012. Let’s make it a great year where the trends are what we make them.

Flicker photo cred: Alex E. Proimos

In Eagan, it appears a project called the Connexion is on the boards to take advantage of the new law.

If you already have a center and want to get better, Xcel Energy will offer rebates to make your  your data center run more efficiently.

Certainly, Minnesota is getting a bit more tech attention as of late. Enough so that it might get people believing in MN’s role as worthy of concentrated, collective, creative  efforts toward building more technology service clustering and shared marketing efforts. Blandin Foundation and others are working hard to help connect and attract to the rural, now we can takes that spirit and recent mojo to double down.

Maybe Google will reconsider Duluth as their next fiber target. The recent visit couldn’t all be PR and targeted meetings?

Data management is set to grow 800% in the next five years. Sound like a good market to invest in? Our services at Colliers are positioned to help all these groups make sure they are making smart moves and strategic decisions when it comes to technology and commercial real estate.

Maybe sports equipment is destined to be combat garb in the future but until we get there, we’ll still need to do something with all our buildings. You can’t drive them to the fortress protected gas pump in the desert and they cost too much money and CO2 to tear down.

But lots of the built environment has adapted to the times in order to survive.  Some special purpose buildings have found new life by finding a new audience to adapt the space with a similar use. The Fort Snelling Boy Scout Base Camp for example. Some old industrial buildings have been adapted to house new uses like data centers.  And in the retail world, tenants come and go as do the trends but as online retailing matures and mass-consumerism takes its necessary lumps, new tricks for old malls are showing to be gun ranges and go-carts.

The bottom line is we can get pretty creative when we want to survive. But I wonder what Max’s dog would think about dog daycares?

Cloud computing, outsourced IT infrastructure, 3rd party data management, etc. would make it seem IT is headed toward earning the title of the “fourth utility” for everyone to use.  Co-working, telecommuting, contract vs. career engagement, 3rd party logistics and a reversing trend toward more local manufacturing are making commercial real estate or  the business base of operations more fluid.

We are using more partners for mission critical than ever before. IT and CRE are at a crossroads where the space inside the organization does not need to be more scarce but more sacred. Power consumption for data and collaborative floor plan for employees are two drivers in this road to where we are lowering the sqft per employee and rising the $ per KW count. I soon see the co-location applying more to corporate office strategies than data centers and office suite applying more to the place you house your data than your people.

Its an exciting time to be in the business of helping organizations collaborate between IT and Commercial Real Estate. Want to collaborate? Reach out to me.

flickr photo cred: bionicteaching

Much has been written and reported on developments in Intelligent Buildings. The modern age of commercial real estate design, construction, function and management has evolved to include technology as the main utility that serves all other utilities. CRE in Minneapolis, MN and elsewhere is attempting to develop, compete and retrofit itself into a new era where efficiency and experience meet environmentalism and economic merit. Tolerance for cost and adoption is guided by the value of the real estate or driven by the demand of the market. It would appear it will be a situation where the integration of technology of real estate has a sound methodology for its self correcting progression.

The real estate of technology, on the other hand, would appear more susceptible, or at least less synergistic between the two parts. Yes, data center design, latency issues, disaster recovery management and virtualization are constantly progressing but it feels more like catch-up. Energy efficiency, geography, power sources are all real estate related issues that when you actually look at where a lot of the Internet traffic is routed, it looks more like cart paths than grids. Yes, the power grid, power centers of commerce and information need drive the development but with data centers now going near the Arctic Circle, its apparent data needs, and can, be anywhere.

Its almost scary to think of the all the information going through a place like 60 Hudson Street. The linked video is great little overview that got me thinking about all this and saying, DATA WILL BE THE NEXT DRIVER OF COMMERCIAL REAL ESTATE ABSORPTION/DEVELOPMENT if it is not already. What do you think?

60 Hudson Street and the Hidden Internet

flikr photo credit: UggBoy♥UggGirl [ PHOTO // WORLD // TRAVEL ]

flikr photo cred: ifmuth