VOLUME 31, NUMBER 12
©2015 Law Bulletin Publishing Co.
December 2015
Avison Young: Industrial market soaring in Midwest markets, including Minneapolis/St. Paul
By Dan Rafter
H
ow strong is the industrial market in Minnesota and across the nation? A new report from Avison Young says that the volume of spec industrial construction delivered in the United States has jumped 240 percent since 2012. In raw numbers? The volume of spec construction has jumped from 43.3 million in 2012 to 147 million square feet this year, according to Avison Young's research. Erik Foster, principal of Avison Young and practice leader of the firm's industrial capital markets division, said that the speculative industrial boom started on the coasts -- mostly the West Coast -- and has now moved across the country, including to several major Midwest markets. "Certain Midwest markets, such as Columbus and Indianapolis, Chicago,
have seen a lot of spec industrial activity starting about two years ago," Foster said. "We feel that this increase in spec development will only continue, and in more Midwest markets." One of those strong industrial markets in the Midwest? Foster said that the Minneapolis/St. Paul market is a solid one. It might not be quite as busy as traditional distribution-focused markets such as Indianapolis and Columbus, but Foster said that it continues to be a strong industrial performer. Foster said that the Minneapolis market showed its industrial strength in July. That's when the market saw the $48.5 million sales transaction of the 585,200square-foot BAE Building at 4800 E. River Road. That property sold for an impressive $80 a square foot. "We think the trend toward more spec industrial development will only continue," Foster said. "We are at record-low vacancies for many of the markets in Avison Young to page 20
JLL’s Mazzocco: CRE markets only getting stronger in the Twin Cities By Dan Rafter, Editor
N
ick Mazzocco knows just how strong the Minneapolis/St. Paul commercial real estate market is. He’s the newly promoted project and development services lead in Minneapolis for JLL. We recently spoke with Mazzocco about the strength of this real estate market. Here is some of what he had to say about the boom times in the Twin Cities.
A solid base: One of the reasons for the success of the commercial real estate market here is that we have a high concentration of Fortune 500 companies in this town that are all growing in this market. The strength of our corporate sector is a big reason for the activity in this market. We have been fortunate, too, to have a lot of large public infrastructure-type work going on, too. The last thing I’d mention is that people and businesses here really want to be in the CBD. That is creating a lot of activity in downtown Minneapolis and
downtown St. Paul. A sizzling apartment market: Apartments, in particular, are getting built at a rapid pace. And there are a few more major multifamily projects yet in the pipeline here. The Downtown East development surrounding the new Minnesota Vikings stadium is having a significant positive impact on the area. That is a billion-dollar investment in a part of town that was not Mazzocco to page 21