VOLUME 35, NUMBER 10
©2019 Real Estate Publishing Corporation
November/December 2019
Minneapolis CRE market attracting outside investors, plenty of activity
365 Nicollet, photo courtesy of Opus Development Company By Dan Rafter, Editor
S
teady might be the best way to describe the commercial real estate industry in Minneapolis and St. Paul, with all the major commercial sectors showing at least some positive signs. But steady might not be the most appropriate description for two of the sectors here. The industrial and multifamily sectors? The word “booming” is more appropriate for them.
These sectors are performing well throughout the Midwest, of course. But they are performing especially well throughout the Minneapolis/St. Paul region. Just ask Phil Cattanach. He’s vice president and general manager for Minneapolis-based Opus Development Company. Cattanach said that demand is still outpacing supply here in both the multifamily and industrial sectors. And when he looks ahead to 2020, Cattanach says, there are few signs that either sector will slow
down much in the coming months. And in even better news, those sectors that aren’t quite as hot as multifamily and industrial remain firmly in that “steady” arena, with new projects still popping up across the Minneapolis/St. Paul area. Cattanach pointed, for instance, to seniors housing, which he said is still in great demand in the Twin Cities area. He said that demand for build-to-suit office products and even specialized retail remain MPLS to page 12
Across the nation – and the Midwest – multifamily market still on the rise By Dan Rafter, Editor
W
hat’s the strongest commercial sector right now? In most, if not all, major Midwest markets, it’s industrial. But a close second? It’s multifamily. And the strength of this sector – buoyed by the growing number of people who want to live in the center of urban areas – is showing no signs of slowing. Consider the latest research from Berkadia. According to the company's 2019 third quarter multifamily
report, the occupancy rate for apartments across the country stood at 95.8 percent in the third quarter of the year. That figure is strong and is unchanged since the third quarter of 2018. And apartment rents? Those are on the rise. Berkadia reported that the effective average apartment rent stood at $1,411 in the third quarter. That's up 3.2 percent the third quarter of 2018. With numbers like this, it's not surprising that developers are eager to build new multifamily properties. Berkadia reported that developers added 219,117
apartment units during the first three quarters of this year. Net absorption has been strong, too. Berkadia reported that 236,669 apartment units were absorbed during the first three quarters of 2019. But how strong is the multifamily market in the Midwest today? Very, as a look at some of the busiest Midwest markets will prove. Kansas City is a good example of a market that is seeing plenty of multifamily activity. Kenneth Block, managing principal with Block Real Estate Services in Multifamily to page 8