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Regional Data —continued <br /> SALIESVOLUMEAND CAPITALIZATION F • <br /> Twin Cities Office,Industrial, Retail Properties <br /> M MARKETHOLUME s CAP RATE <br /> $5 11 <br /> $45 103 <br /> S4- 10 <br /> $33 43 <br /> $3 7 ..9 <br /> V5 <br /> $2.5 8.4 8.2 8S <br /> Z <br /> $2 7 7.8 B <br /> J 755 <br /> J <br /> $IS 1 - 7.3 7.3 75 <br /> 7.0 <br /> W $1 6.7 -46 - 7 z <br /> $OS 6.5 d <br /> $0 6 rL <br /> JUNE'04 JUNE'05 JUNEW JUNE'07 JUNE'08 JUNE'09 "U"E'ID JUNE'!I JUNE'17 JUNE'13 JUNE'14 <br /> %rad�xsl ArW t,s Im <br /> In general and for most properties types, capitalization rates have been steadily declining <br /> since 2010. Recent data is showing stabilizing rates. <br /> The Twin Cities commercial real estate market enjoyed continued success in first half 2014 <br /> as the vacancy rate remained stable at 11.8%, which is equal to pre-recession levels. <br /> Further, the market recorded 384,000 SF of positive absorption, pushing activity into the next- <br /> tier cities for land, residential and industrial sectors. <br /> Commercial real estate investors are increasingly coming to the Twin Cities in search of <br /> yields higher than those available in larger, more expensive top tier markets. Investor <br /> demand in the Twin Cities continues to chase multiple offerings in the market. The most in <br /> demand product types include class A core office buildings in downtown Minneapolis and <br /> select suburban locations. Capital is also chasing apartment properties, grocery-anchored <br /> retail centers and modern industrial distribution buildings with minimal office finish. <br /> Outlook: The U.S. economy added 288,000 jobs in June, making it the fifth consecutive <br /> month that employment growth has exceeded 200,000. This marks the first time since 1999- <br /> 2000 that the U.S. economy has generated such sustained strong job growth. This is great <br /> news for the commercial real estate sector. More than 2.9 msf of space is expected to be <br /> added to the overall market in second-half 2014 thanks to multiple industrial, medical office <br /> and retail projects currently under construction coming on line. If the majority of the <br /> completion dates are met, the Twin Cities will enjoy its highest historical construction level <br /> since 2007. <br /> Source: The Compass, Northmarq, July 2014 <br /> 12 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com <br />