Here is a recent article by Burl Gilyard, a staff writer for Finance and Commerce, regarding the Industrial Property Market here in the Twin Cities. While the news is not great it does show some movement in a better direction.
The good news about the industrial real estate market in the Twin Cities? It’s not quite as bad as last year.
The overall Twin Cities industrial market posted negative absorption of 705,000 square feet over the last year, according to the annual survey by the Minnesota chapter of NAIOP. While the market is still losing ground, it’s a better showing than the negative absorption of 1.7 million square feet posted last year.
But it’s a stark change from the reporting periods of 2006-2008, when the market posted cumulative positive industrial absorption of more than 6.8 million square feet of space. (Absorption, a standard barometer of the health of commercial real estate markets, measures the change in occupied space from one reporting period to the next.)
At the same time, the overall vacancy rate climbed to 13.1 percent, the highest rate in recent years. Vacancy is reported even higher in some submarkets: the vacancy rate is 18.8 percent in the Southeast metro and 14.1 percent in the Southwest.
Market fundamentals remain weak in a climate with high vacancy, soft demand and declining rental rates. The current environment leaves very little room for new development, with the exception of some build-to-suit projects for specific users.
Brokers are now often finding themselves representing banks on properties that have gone back to the lender.
Read the full article at Finance and Commerce.