According to the Bureau of Labor Statistics (BLS), the unemployment rate for the Mpls-St Paul metropolitan statistical area (MSA) decreased 30 basis points to 3.1% for February 2020 from 3.4% for February 2019. The unemployment rate for the US was 3.5% in February 2020 down from 3.8% last year. State of Minnesota unemployment rate was 3.1%. The Mpls-St Paul MSA saw an increase in job growth but a decrease in industrial jobs in manufacturing dropping 400 during the same period.
The Mpls-St Paul industrial market consists of 258 msf in eight counties across the metro and posted over 223,000 sf of positive absorption for Q1 2020 while 184,000 sf positive absorption for multi-tenant properties. The overall vacancy rate for the market stands at 4.7% and multi-tenant vacancy was 7.4% for Q1 2020. The average asking lease low rate was $5.81 and high rate was $9.35 NNN for Mpls- St Paul. To date, there are 23 construction projects throughout the market totaling just under 3.7 msf and 5 properties were delivered this quarter with 575,902 sf.
At the close of Q1 2020, the market experienced over 2.2 msf of leasing activity in 194 transactions with AbelConn leasing the largest space of 110,329 sf in the Northwest market. The Southeast market vacancy rate being the tightest at 4.1% for all properties while the Northwest market topped at 6%. The Northeast market had four of the top five property spots in absorption with Bluvera leasing 93,000 sf, Hajoca leasing 75,845 sf and Lindenmeyr Munrow leasing 60,102 sf. The Northwest market experienced the largest vacancy of Honeywell with 250,000 sf. The Southwest market held the next two spots with Sams Club vacating 180,000 sf and Quad Graphics/ American Color vacating 160,000 sf.
Total Inventory: 258,482,636 sf
Total # of Bldgs: 3,004
Asking Rate Low: $5.81 NNN
Asking Rate High: $9.35 NNN
Under Construction: 3,728,557 sf
Congratulations to Ebisso Uka, owner of Rift Valley Transportation for his purchase of the building at 45 Empire Drive, St. Paul, MN. Rift Valley provides transportation to children who have no other way to attend school. The 33,000 square foot building will be used for storage and maintenance of vehicles used in the transport of children to and from school.
The building was formerly the home of Sitma USA, an Italian based manufacturer of integrated mail processing equipment. It was built and added to in 1991 and 1997, respectively. The 27,000 square foot warehouse will house up to 80 vehicles and the 6,000 square foot office will be the hub of the 200-person Rift Valley company.
This was a complicated transaction. It required Phase II environmental and vapor testing, a Class N license from the City of St. Paul, in-depth building due diligence, construction bidding, and financing approval. John Young and Joe Schultz guided this purchase through its many hurdles with a very short due diligence period. Both John and Joe extend a hearty “Congratulations!” to Mr. Uka and his company.
John and Joe continue to work for Mr. Uka in the lease or sale of his current building at 1033 Thomas Avenue, St. Paul. This 14,000 square foot building is near Lexington and University Avenues and is a great location for another small business growing in St. Paul.
Written by John Young, CCIM | Vice President
We are proud to announce that once again TCN Worldwide has been named in the top 25 for Lipsey’s Top Brand Survey. Each year the Lipsey Company performs a survey to establish the most recognizable names inside of the Commercial Real Estate Industry and this year TCN Worldwide increased its brand recognition moving up two spots. Thank you to all who voted, and especially our TCN members!
Learn more about Lipsey’s Top Brand Survey here: https://lipseyco.com/top-commercial-real-estate-companies/
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The former Java Jacks & Studio 2 Building in Minneapolis will become a new neighborhood hang out with the addition of a yet-to-be-named restaurant. John Young, Vice President Brokerage Services sold the building to a partnership between United Properties and Westwood Hills (a development company). Plans are in the works for a new restaurant, which should be open in late Summer or early Fall. The property garnered several offers and a lot of interest by the adjoining neighborhood. It has been a favorite in the area for a couple decades and now it will have another great community asset, coming soon.
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High-End Amenities Make Employees More Productive
More and more industrial spaces are becoming “the place” to work. The amenities offered in newer industrial buildings rival those of modern office buildings. Natural light, shower facilities, work-out rooms, beautifully landscaped grounds are becoming more common in warehouse buildings. Dan Rafter’s RE Journal post discusses industrial companies need to be more competitive in the labor force. They do this by considering not only location but higher-end amenities that make warehouse employees happier and more productive.
READ MORE: High-end amenities no longer just for office buildings — Industrial Spaces Offer Perks Too
By Dan Rafter, RE Journal.com, October 6, 2016