NorthMarq Issues 2008 Mid-Year ‘Compass’ Report for Twin Cities Commercial
Real Estate Market
New Compass Report contains first-ever look at retail side-shop space
MINNEAPOLIS, Minn. (July 31, 2008) – The Twin Cities commercial real estate
market is feeling the effect of the unstable economy, but certain market
segments are doing better than anticipated, according to NorthMarq’s mid-year
2008 Compass report, formerly known as the United Properties Outlook Report,
released today. Ongoing concerns with the current economy have certain segments
in a holding pattern.
Though the majority of the overall market is slower than expected, the
multi-tenant office market finished better than anticipated in the first half of
2008 with 158,000 sq. ft. of positive absorption. The medical market has had
sluggish activity but remained strong with only 10.4 percent of 5,468,581 sq.
ft. vacant; the industrial market had less movement due to tenant hesitation.
Land fluctuated the first half of 2008 with industrial prices trending higher
due to more demand and retail land pricing weakening.
Retail and Investment segments have been struggling the most due to the economic
slump. Retail has seen its highest vacancy rate since 2004 with small-shop space
seeing a vacancy rate of 16.17 percent. However, high-end retailers and
lower-end discounters have been performing better than expected. The investment
sector has seen the marketplace become frozen with no thrust happening in any
segment due to lack of confidence among both buyers and sellers and the price
and availability of capital.
With the economic outlook as clouded as it is, the market will likely remain in
a holding pattern, particularly with investments. It is predicted that office
will remain flat or continue to slowly creep up with tenants electing to renew
leases rather than move to larger space. Industrial can be expected to see
moderate absorption in the next six months as speculative development slowly
rebounds. More opportunities will unfold for land buyers with a willingness to
buy and hold until the market turns around. Retail will continue to be in a
downward turn until the market begins to swing toward the positive.
About Compass
NorthMarq’s bi-annual Compass report compiles comprehensive market data and
analysis for all commercial property types, including office, retail,
industrial, multi-family and medical office. The report also features an
overview of the Twin Cities economy and an analysis of the market's commercial
real estate investment trends. The July 2008 report is available on the web at
http://www.northmarqcompass.com. The Compass report is the next generation of
United Properties’ Outlook report, published since 1997.
About NorthMarq
NorthMarq offers a full range of commercial real estate solutions across the
country from its headquarters in Minneapolis, Minn. The NorthMarq Capital group
offers commercial real estate investment banking, investment services, real
estate debt and equity financing, and commercial loan servicing in 29 offices
coast-to-coast, with more than $13 billion in annual production volume and
services a loan portfolio of more than $36 billion. NorthMarq Corporate
Solutions works nationally with mid-sized corporate users to manage their real
estate needs. NorthMarq Real Estate Services provides brokerage, property
management, healthcare services and construction to investors and space users in
the Minneapolis/St. Paul market. For more information, please visit
www.northmarq.com.
Contact:
Martha Nevanen
952 893 7539
martha.nevanen@marquetteRE.com
Heather Schwartz
612 337 0087