VOLUME 36, NUMBER 1
©2020 Real Estate Publishing Corporation
January/February 2020
Plenty of Good News for Minnesota & Midwest Industrial Markets in 2020
By Dan Rafter, Editor
C
hicago might remain the top-performing Midwest industrial market, according to Avison Young's new Forecast 2020 report. But the mid-sized markets of Minneapolis, Indianapolis and Columbus are also showing plenty of industrial momentum, according to Avison Young's research.
The Minneapolis industrial market is especially interesting. As Avison Young reports, the Twin Cities area lacks large blocks of space, particularly in the region's Southwest submarket. This is expected to bring new industrial construction to the market in 2020. Avison Young predicts that this new speculative construction will spread into secondary submarkets and into outer communities in the Minneapolis-St. Paul metropolitan area. The reason? The lack of
available land sites in the Twin Cities' urban core and inner-ring suburbs. In other Twin Cities industrial news, Avison Young says that industrial rents here should rise in 2020 because of low vacancy rates and strong demand for e-commerce and reverse logistics. Amazon’s fulfillment center in the Southwest metro and similar developments in the Northwest submarket are fueling e-commerce and will continue to drive Industrial to page 12
Cushman & Wakefield: 2019 Ends Strong for Twin Cities CRE Market By Dan Rafter
T
he commercial real estate market in the Twin Cities remained on a hot streak in the second half of 2019, with vacancies in the office, industrial and retail sectors continuing to fall. Cushman & Wakefield, in its recently released Minneapolis/St. Paul Compass Report, said that at the end of the fourth quarter of last year, the vacancy rate across office, industrial and retail properties stood at a
low 10.4 percent. That’s down from 10.8 percent as of the end of the first six months of 2019. According to the report, 2.2 million square feet of commercial space was absorbed by users in the office, industrial and retail sectors in the second half of last year. The total absorption for 2019 came in at 4.2 million square feet. That is the strongest absorption in the Twin Cities market since 2015, when 5.5 million square feet of space was absorbed. The 2019 absorption rate was more than 1 million
square feet above 2018’s total, Cushman & Wakefield reported. Much of the absorption, of course, came in the thriving industrial sector, which saw 1.5 million square feet of absorption in the second half of 2019. For the whole year, the Twin Cities market absorbed 2.9 million square feet of industrial space. That’s an improvement over the 2.78 million square feet of industrial space absorbed during all of 2018. The office and retail sectors saw strong ends to CRE to page 8
