Tag Archives: Minneapolis

What does Q4 2011 tell us about the 2012 Minneapolis / St. Paul area office market?

Posted on January 16, 2012 by Dan Peterson| Leave a comment

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 25th 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

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Posted in Leasing, Market Trends, Office, Technology

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New opportunities in Old Nordeast Minneapolis

Posted on January 4, 2011 by Dan Peterson| 3 Comments

Adam Commercial is fortunate to have been given the assignment of representing the landlord of 1300 Second Street NE. For those who do not know, 13th Ave and 2nd St is home to a four-corner commercial district in the midst of the Northeast Art District of Minneapolis. This area has been gaining national attention for its hip factor in restaurants, music and retail… not to mention the namesake, ARTS. Hear of a thing called Art-a-whirl?

We Minneapolitans know all about this but what you might not know is the Northeast Bank Building has a couple options for budding businesses to set up shop with a new lease. If your taste is slightly different and ownership is more your meal, we have a property for sale next door. Check out the NE goodies at Northeast Bank Building or just give us a call or email. We’d be happy to help get you acquainted, or reacquainted with this new opportunity in old nordeast.

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Posted in Creative Culture, Leasing, Retail

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The Corporate and Not-so-corporate CRE Environment

Posted on October 17, 2010 by Dan Peterson| 4 Comments

People or servers go here?

From Burl Gilyard’s October 13, 2010 article in Finance and Commerce: – A discussion of the current state of corporate real estate was on the menu at Wednesday morning’s monthly meeting of the local chapter of NAIOP, the Commercial Real Estate Development Association.

“The employees are driving some of the amenities,” says David Wright, vice president and asset manager with U.S. Bancorp…the company now weighs issues including access to transportation, green space and proximity to other amenities when considering real estate decisions. Wright alluded to an annual U.S. Bancorp spring survey of its employees – all 65,000 of them. “One of the key elements of that survey now is the workplace,” Wright said. As a result of the survey, Wright said, the company is investing in upgrading office furniture. At the same time, the company is using less space per employee, a trend among all office users. “We’re knocking down the amount of square footage per person,” Wright said. “You’re starting to see the need for less and less square footage.” In the past, industry benchmarks generally suggested that companies needed 250 square feet per employee. Those figures count common space, break rooms, conference rooms and other shared office space. Today, Wright estimates that the company is using about 185 square feet per employee.

When it comes to work performance, environment is one of the most underrated issues of success.  The work environment is the most important source of focus and inspiration a company can provide its employees. A company’s mission, leadership and ability to provide personal purpose often take a back seat to environment when it comes to the reason why people stay or go. The physical space & systems and the people that use it all make up a work environment. An environment must clearly support you and your employees’ goals in your for both to be successful.

The key aspect a physical work environmentmust provide is productivity. Space, equipment, lighting, work flow -all physical systems need to enhance the ability to be productive.  If you are too packed in a space with no natural light with old computers you may save on overhead but you will loose on the bottom line.

The key aspect to the people work environmentis to provide energy and collaboration. Within the company, the building and in the community, the people that provide a synergistic vibe will attract others to do the same. The unproductive will be weeded out and the businesses and individuals that remain with thrive.

So you have a good business and you say why does this matter? Because recruitment and retention should matter to anyone that has employees. Don’t have any employees? What about you? Want to stay happier, more productive? Surround yourself at a business center, executive office center or co-working space.  Surrounding yourself with the right digs, people, equipment and light will, at the very least, keep the happy worker vibes and potential collaboration rolling.

Know you need to improve the environment but not sure how? Contact us.Well, help you get started. Its can be as simple as starting a conversation with a firm like Adam Commercial Real Estate that provides corporate services.

Photo Credit  By Great

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Posted in Creative Culture, Office

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What is up with International Market Square (IMS)?

Posted on October 7, 2010 by Dan Peterson| 1 Comment

A recent trip to the very historic, very cool, early adaptive reuse example of Minneapolis commercial real estate has left me thinking, what is up? What a cool place and what a great opportunity for the office / creative space user businesses of Minnesota.

Historically, the IMS (sticking only to the commercial side of the property) has been known as ‘the largest home and commercial interior design marketplace in the Upper Midwest.’ See more on their history here.

The building itself has decent green cred for the updated systems that have earned them an ENERGY STAR rating.

But with 1/6th of the building vacant and a tenant mix looking at a long  road back to any type of business recovery (and possibly never coming back), building management in now looking to reposition the property to be more accommodating to traditional, or possibly non-traditional, office tenants. Still the synergy of new blood, great spaces, easy access, great location and potential cross-tenant collaboration makes me think this baby has REAL POTENTIAL.

Its going to take some brave first movers that can pump up the existing tenants that want new blood. Its going to take commercial real estate brokers and building management to work out creative deals that include realistic, incentive rich, rates to get the mojo rolling. Its going to take a niche industry movement (clean tech, renewables, creative services) recognizing this brick and timber asset can be the hub of energy that invigorates and inspires their employees. And, not above all but certainly a big help will be the building amenities updated beyond status quo to lead and attract a new generation of leasing tenants. Shared video conference center, shower and athletic facilities for multi-mode commuters,  better coffee and a fresh take out bistro would go a long way to making IMS stand for Inspiring Multi-tenant Support-system or Investment Made Sustainable.

Photo cred: http://www.flickr.com/photos/davesag/

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Posted in Creative Culture

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