VOLUME 35, NUMBER 8
©2019 Real Estate Publishing Corporation
August 2019
Renovations, modernizations powering Minneapolis office market
By Dan Rafter
S
teady. That’s the word Tom Tracy, executive director with the Minneapolis office of Cushman & Wakefield, uses to describe the office sector in his city. And the numbers back him up: In the first half of 2019, the Twin Cities area absorbed about 560,000 square feet of office space.
This doesn’t qualify as a boom. But it is good activity. And, in good news for this sector, Tracy says he expects the Minneapolis-area office market to remain as steady throughout the rest of 2019 and into 2020. “The market isn’t necessarily super robust,” Tracy said. “But we do like that it is steady. There is steady leasing activity in the market. There is a lot of investment sales activity. And there are some exciting projects going on, both new construction and a lot of
redevelopment of older office space. The next 12 months look to be interesting ones for us.” That redevelopment part is interesting. In markets across the Midwest, developers are modernizing older office space. This is important to companies that want to attract and retain the best talent. These companies need offices that look new and have the amenities that today’s workers want. If they can’t offer that? They’ll struggle when Downtown to page 12
Retail Evolution Continues in the Twin Cities By Liz Wolf
T
he state of the Twin Cities retail market appears to be a mixed bag. While some landlords and retailers are successfully figuring out how to meet the consumers’ changing tastes and shopping habits, others are struggling to stay afloat in this ever-evolving retail environment.
“It’s a situation of the haves and have-nots,” says Peter Dugan, a vice president at CBRE’s Minneapolis/St. Paul office, who specializes in tenant representation retail services. “I think the successful retailers are meeting the customer where the customer is -catering to their wants, not so much their needs, but their wants.” A “retail shakeup” has occurred with the rise in online shopping and the downfall of many department stores and big-box retailers.
National retail bankruptcies and store closures impacting the metro have included Sears, Kmart, Herberger’s, Toys “R” Us and Babies “R” Us. However, it’s “far from gloom and doom” since in many cases, national retailers were performing relatively well in the Twin Cities, and many are located in high-demand, high-traffic trade areas, according to Cushman & Wakefield’s July 2019 Compass Report. Retail to page 8