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CityBusiness August 15,1997 35
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<br /> INDUSTRIAL house structures with 24-foot ceilings and 40
<br /> percent or less office space. Investors love
<br /> from page 6 them because they cost less in the long run to
<br /> operate,but Suski said he's received several
<br /> down. "As the summer ends, there's been calls for showroom space (meaning lower
<br /> probably a little bit more development than ceilings) and industrial properties that are
<br /> demand," he said. The critical question is more than 50 percent office. -
<br /> whether demand will continue' Another geographic area the industry is
<br /> Since 1993, lease rates have spiked by watching closely is the southwest market,
<br /> between 25 percent and 35 percent. But which has 1.8 million square feet of indus-
<br /> some discounts and slightly enhanced tenant trial space either under construction or
<br /> ear's record$902 mil- improvements are starting to be offered to planned—the highest level among all the
<br /> year ended May 31. tenants, Shaver said. "Nothing like the free Twin Cities geographic sectors,according to
<br /> Ilion;cash flow rose 5
<br /> lion.Company offi- rents of the early'90s,"he added. the NAIOP report.
<br /> ;s,including commodi- But if there is an oversupply, it's a Leading that construction is Shakopee,
<br /> rkets,were strong,but regional phenomenon, said Scott where the new Bloomington Ferry Bridge has
<br /> 1 oilseeds and excess Frederiksen, an industrial broker with made driving to the once remote community
<br /> pany's processing Bloomington-based Welsh Cos. Inc. a short hop. Hoyt Development, Chicago-
<br /> "Certain submarkets have an excess of based First Industrial Real Estate, and Des
<br /> space,"he said,pointing to the Twin Cities' Moines-based Principal Mutual Life
<br /> ;ales up northwest sector as an area that may be Insurance Co.,among others,are all building
<br /> ,icland Stores Corp. reaching the saturation point, especially in significant spec warehouse and
<br /> :comparable-store Plymouth. "New product in Plymouth has warehouse/office space in Shakopee's Valley
<br /> red Aug.2 rose 9 1.4 pe
<br /> rod increasedd bby r- been slower to lease than developers rs would Green Business Park. "There is an extreme
<br /> ,ompared with$109.9 like,"Frederiksen said. : level of enthusiasm that we now have by way
<br /> ,eriod ended Aug.3, The northwest submarket, however, did of fantastic access," said Jon Albinson,pro-
<br /> s. have the lowest overall industrial vacancy ject director for the privately owned park.
<br /> rate of 6.3 percent of all the markets in June, Albinson touts Shakopee as the altema-
<br /> 1pro r trading ' according to United Properties. Live to Eden Prairie and west Bloomington,
<br /> usure Inc.has denied Suski, a broker for Carlson Business which have virtually run out of space for
<br /> ck trading,allegations Center in Plymouth among other projects, new industrial development. "There just
<br /> tock Exchange to stop believes there is some cause for concern ain't no land on the north side of the river
<br /> t investigated The everywhere, including'the northwest "We anymore,"he said.,
<br /> :h conducts much of its
<br /> :nits stock jump from don't see the same amount of pent-up However,industrial brokers and develop-
<br /> 7 in a seven-month demand you saw a year ago,"he said,adding ers throughout the metro area are waiting to
<br /> ed at$15. that the:first phase:of Carlson Business see whether that's true. "I think it's
<br /> Center was totally leased in May 1996,but unproven,"said Suski."In the past,it was a .
<br /> ng Kong flights the second phase is still 20 percent vacant, stretch to get somebody to go north of
<br /> :t Airlines has received Carlson Real Estate Co. Inc., which [Highway] 55 in Plymouth. Now you're
<br /> it nonstop service to developed the business center,using up all asking people to go across the river?People
<br /> 'lans to run three the industrial land it owns,will be focusing set their perimeters?'
<br /> on office space unless a tremendous Indus- Arne Cook, regional director of First
<br /> tional shares trial opportunity comes along, said" Matt Industrial, which plans to develop 750,000
<br /> Van Slooten,the Minnetonka-based compa square feet of space at Valley Green,agreed
<br /> p to three minion new ny's managing director of investments. that prudence is necessary and is only build-
<br /> for the bagel wars in And that's fine with him. "There'sget- in 126,000 square feet in the first phase.
<br /> mpany wants to use g q
<br /> cease the number of ting to be more competition`among those "We'll see how the leasing goes on the first
<br /> tares it owns and oper- new [industrial] buildings than there were project,"Cook said:
<br /> th area.The comps- five years ago,"he said.Since many of those However, other markets remain very
<br /> t its value when it dis- buildings have similar specifications and strong,especially if there's limited space to
<br /> fling the plan- locations, they end up competing on price. build,such as the Midway area,where First
<br /> 'We don't want to compete on price,"Van Industrial is developing a 100,000-square-
<br /> panded Slooten said, foot business center. "There's significant
<br /> pipeline project, n Suski said the market might need to diver- barriersto en
<br /> orthern States Power try with respect to obtaining
<br /> Jna:, e 800 mile " sify a bit after concentrating on office/ware- 'larger pieces of land,"Cook said ■
<br /> coin oba to
<br /> to .p to 1.2 bit-
<br /> 'he addition of another INCENTIVES
<br /> system could force
<br /> to 2 billion cubic feet from page 6 3 t t 4.4
<br /> `Because smoking is not a diagnosis,or a r`
<br /> ig and Tim JohnsonF
<br /> physical condition,it is a lifestyle choice,youri 1
<br /> are able to give a discount[for nonsmokers],
<br />
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