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Is a Sublease Space Right For Your Company?

For firms whose growth is uncertain . . . or . . . perhaps a firm that is opening a new office or starting a business . . . subleasing space can be a sound alternative.  However, just as with any real estate transaction, caution is always in order.

Get to Know The Sublessor:
First, it helps to understand why the original tenant wants to sublease.  Is their business struggling?  Have they lost a number of key employees?  Did they overestimate their future growth?  Or perhaps they are reconfiguring their space into a more collaborative environment and find they don’t need all of the space.  What are their future plans?   When does the prime lease expire?  All of this is key since subtenants must comply with the terms of the prime lease.
Space Planning:
Second, most sublease space is leased in an “as is” condition, meaning that the prime tenant will provide no dollars for any changes to the space.  Therefore, review the language of the lease to see what restrictions might apply to any alterations.  Generally, the prime landlord’s consent and approval is mandatory.  Also, if you plan to make any significant changes, consult the prime landlord.  Changes that actually affect the configuration or general function of the space can cause problems in re-letting the space once you move out.
Have an Real Estate Professional Review the Lease:
Lastly, ensure that the terms of the sublease document are sound and complete and that you, as the subtenant, are protected in the event of some kind of default by the sub-landlord.

If we can offer any advice or assist in any way, please feel free to contact Paramount.  Proper preparation before moving forward is essential to any successful real estate transaction.
For the best in commercial real estate
service and solutions, call Paramount.
(952) 854-8290

MNCAR Office Market Trends – Minneapolis-St. Paul (2018-Q4)

OFFICE MARKET TRENDS | Q4 2018 | Mpls-St. Paul
Economic Overview
According to the Bureau of Labor Statistics (BLS), the unemployment rate for the Mpls-St. Paul metropolitan statistical area (MSA) decreased 50 basis points from 2.5% in November 2017 to 2.0% in November 2018. The unemployment rate for the U.S. was at 3.8% in October 2018, up from 2.8% for the State of Minnesota.  The Mpls-St. Paul MSA saw an increase in office job growth, professional, financial and information growing by 6,600 during the same period.
Market Overview
The Mpls-St.Paul office market, consisting of over 95 msf of space in seven counties across the metro posting an availability rate of 16.5% for Q4 2018.  The vacancy rate for the market stands at 14.6% to close out 2018.  The average asking lease rate for Mpls-St. Paul came in at $24.29 psf FSG. To date, there are over 12 construction projects throughout the market, totaling just over 2.2 msf.
Market Highlights
At the close of Q4 2018, the market experiences over 1.3 msf of leasing activity and the vacancy rate finished the year at 14.6% in total. Class A properties ended the year at 11.8% with the Mpls CBD Core market posting the lowest rate at 9.7% for class A properties. The top five lease transactions accounted for over 342,788 sf throughout Mpls-St. Paul with the largest leased space for Tactile Systems Technology leasing 100,000 sf in the West market.
READ ENTIRE REPORT: Q4 2018 – Office Market Trends
Written By: MNCAR/Redi Comps

MNCAR Industrial Market Trends – Minneapolis-St. Paul (2018-Q4)

INDUSTRIAL MARKET TRENDS | Q4 2018 | Mpls-St. Paul

Economic Overview
According to the Bureau of Labor Statistics (BLS), the unemployment rate for the Mpls-St. Paul metropolitan statistical area (MSA) decreased 50 basis points from 2.5% in November 2018. The unemployment rate for the U.S. was at 3.8% in October 2018, up from 2.8% for the State of Minnesota.  The Mpls-St. Paul MSA saw an increase in industrial growth in manufacturing growing by 6,900 during the same period.
Market Overview
The Mpls-St.Paul industrial market, consisting of 119 msf of space in either counties across the metro posted an availability rate of 11.4% for Q4 2018.  The vacancy rate for the market stands at 8.2% to close out 2018.  The average asking lease low rate was $5.82 and high rate was $9.00 NNN for Mpls-St. Paul.  To date, there are 17 construction projects throughout the market, totaling just over 209 msf.
Market Highlights
At the close of Q4 2018, the market experiences over 1.9 msf of leasing activity and the vacancy rate finished the year at 8.2% in total with the Southeast market posting the lowest rate at 7.0%.  The top five lease transactions accounted for over 490,797 sf throughout Mpls-St. Paul with the largest leased space for Asmodee North America leasing 130,000 sf.  Northeast warehouse distribution increased to 15.7% vacancy from 11.3% due to new deliveries totaling 468,188 sf.
READ ENTIRE REPORT: Q4 2018 – Industrial Market Trends
Written by: MNCAR/Redi Comps

Real Estate Tip of the Week-9.27.2018

Have you ever wondered why operating expenses vary from property to property?  Energy consumption, service levels and service contracts can vary greatly so it is advisable to secure the details prior to lease execution.
Several recent office lease transactions Paramount has been involved in highlight the need for a close review of a property’s operating budget.  Some “full service” leases may include daily cleaning, vacuuming, replacing light bulbs and cleaning your breakroom. And then others may not include these services at all or the services may be on a more limited basis.  While most Property owners reserve the right to change rules and regulations and janitorial specs, it is a good practice for your representative to take the time to request the budget and janitorial specifications.  Once you have the detailed information you will be better able to compare properties.   After settling on your most desirable property, a close review of the associated lease language may uncover conflicts or missing details that might surprise you during your term.  As an example, say your employees prefer to eat lunch in your office suite, this practice probably makes it imperative that janitorial specifications would include daily trash service.  No one wants to smell that reheated salmon the first time let alone the rest of the week!
Knowing the service level upfront will allow you the opportunity to verify the details are incorporated into the final lease.  After all, operating expenses and real estate taxes can be 50% or more of your overall rent and you should only be paying for services you receive.
Need real estate advice.  Call Paramount.
TRUSTED.  DEDICATED.  EXPERIENCED.
(952) 854-8290

TCN Worldwide 7th on NREI 2018 Top Ten Broker’s List

TCN Worldwide is honored to be named once again in the Top Ten of the National Real Estate Investor Top Brokers List for 2018; ranking 7th as one of the leading brokerage organizations in the industry.
TCN Worldwide Real Estate, a consortium of independent commercial real estate firms, provides complete integrated real estate solutions locally and internationally. An extensive range of real estate services coupled with a personal commitment to exceed expectations is what allows TCN Worldwide to be a leader in this competitive industry.  Comprised of leading independent brokerage firms, serving more than 200 markets globally, TCN Worldwide combines an entrepreneurial approach with years of local experience.  Around the globe, across all property types and service groups, TCN Worldwide’s more than 5000 brokers and salespeople have a well-earned reputation for providing straightforward expert advice.
See the complete list here:  https://www.nreionline.com/brokerage/2018-top-brokers?full=1

 
 

Real Estate Tip of the Week-9.14.2018

Have you purchased a commercial or industrial building lately? If so, then you know the Minnesota Pollution Control Agency is aggressively regulating vapors that may seep into buildings. Cracks in concrete floors, holes in the foundations, and just plain porous concrete can be conduits for harmful chemical vapors that may exist from contamination on your property or even the neighbor’s property.
Environmental consultants are recommending vapor testing for sites that are near known
groundwater and soil contamination.
If the tests are positive, a second round of testing may be completed before designing a treatment system. Typical treatments include creating negative pressure under the floor slab and venting it out the roof. This can be expensive, $1.00-$2.00 per building square foot. As you may know, when the MPCA is concerned, so are the banks. We have worked on four transactions in the last two years that required vapor treatment. It did not stop the transactions, but the process takes time, effort, and attention to detail in order to be successful.
Need real estate advice.  Call Paramount.
TRUSTED.  DEDICATED.  EXPERIENCED.
(952) 854-8290

Real Estate Tip of the Week-9.6.2018

What is LEED?

In order for a building to earn LEED Certification, it must meet certain criteria and goals within the following categories:

Location and Transportation: How close is the project to mass transit?
Materials and Resources: Will the project use locally sourced, sustainable products?
Water Efficiency: To what extent will the project reduce potable water usage?
Energy and Atmosphere: How will the project improve energy performance and indoor air quality?
Sustainable Site: To what extent will the project utilize nearby natural resources and ecosystems that can naturally take part of the design, minimizing environmental pollution?
Regional Priority Credits: This addresses particular concerns based on project location
Innovation: Any idea that is not covered under the main LEED areas

Each of these respective categories contains a series of opportunities to earn credits.  The project earns points when it uses and integrates these opportunities.  The more points the project earns, the more sustainable is the building.  Depending on the number of points gained, the project can then earn certification as a certified building or as a silver, gold or platinum building.
Benefits of a LEED Certified building are many:

Reduced use of energy and water
Reduced operation and maintenance costs
Reduced construction waste during the construction process
Increased indoor air quality
Usage of recycled materials
Increased employee performance, satisfaction and retention

Need advice on LEED.  Call Paramount.
TRUSTED.  DEDICATED.  EXPERIENCED.
(952) 854-8290

Top TCN Worldwide Member Deals! (2018-Q2)

John Young, CCIM’s transaction with Warner’s Stellian made TCN Worldwide’s-Top Industrial Deals (Q2-2018).  Read more: 2018_Qtr2 Commercial Focus.  Warner’s Stellian purchased an 80,000 SF industrial building located at 2601 Broadway Street NE, Minneapolis. 
TCN Worldwide, a consortium of independent commercial real estate firms, provides complete integrated real estate solutions locally and internationally. With approximately $58.6 billion in annual transactions, TCN Worldwide ranks as one of the largest service providers in the industry. An extensive range of real estate services coupled with a personal commitment to exceed client expectations is what allows TCN Worldwide to be a leader within the commercial real estate industry. Formed in 1989, TCN Worldwide is comprised of over 5,000 commercial real estate professionals serving more than 200 primary and secondary markets worldwide.

Real Estate Tip of the Week-7.26.2018

Qualifying your real estate needs, researching, locating and negotiating a new lease or purchase of a property is by no means the end of the relocation process for most companies. 
One of the most important and costly items within relocating a business operation is the actual move itself.  This activity requires diligent planning, multiple bids for competitive pricing, knowledge related to construction, furniture systems, Tel-com and IT, relocation/moving service providers, and many other move related items.  This is where a seasoned project manager can add tremendous value saving time and money, keeping everything on schedule and handling any problems as they arise.  Why risk exposure to additional costs, disruptions or unforeseen delays and headaches, not to mention the stress the inside person who was tossed the project manager hat will experience.  Interview and select a Project Manager as part of the initial space planning process and the move experience (and costs), will be well worth the cost of a Project Manager.
Call Paramount.
TRUSTED.  DEDICATED.  EXPERIENCED.
(952) 854-8290

TCN Worldwide Among NREI 2018 Top Property Managers

NREI 2018 Top Property Managers List


TCN Worldwide is honored to be named to the National Real Estate Investor Top Property Managers List for 2018.  The ranking is based on total square footage of space managed globally.  TCN manages nearly 446 million square feet.  TCN Worldwide Real Estate, a consortium of independent commercial real estate firms which Paramount Real Estate Corp is a member, provides complete integrated real estate solutions locally and internationally. An extensive range of real estate services coupled with a personal commitment to exceed expectations is what allows TCN Worldwide to be a leader in this competitive industry. Comprised of leading independent brokerage firms, serving more than 200 markets globally, TCN Worldwide combines an entrepreneurial approach with years of local experience. Around the globe, across all property types and service groups, TCN Worldwide’s more than 5000 brokers and salespeople have a well-earned reputation for providing straightforward expert advice.