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United Properties Outlook: Industrial -Northwest
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<br />Southeast ~ Southwest ~ N.ortheast ~ Northwest ~
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<br />~torioal Vacancy
<br />urical Vacancy Buik
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<br />"~ri--,torlcal Vacancy
<br />O~i'ice Showroom
<br />Historical Vacancy
<br />Office 4`Jarehouse
<br />4bsorption by Product
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<br />_storical Absorption
<br />~~> Historical Absorption
<br />Buik larehouse
<br />j? I?~;~rical Absorption
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<br />~, ~listarical Absarotion
<br />Office Warehouse
<br />'~ Nlstorlcal Canstructlon
<br />,cts Planned K
<br />Under Construction
<br />Historical Rental Rases
<br />Tor Office ~ Warehouse
<br />Space
<br />4veraae Net Rental
<br />Rates
<br />Main Summary Table
<br />f3~_...9ing Data
<br />Additional Data Graphs
<br />INFO~M/~TION Page 1 of 3
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<br />Vacancy Inched up
<br />Absorption Turned negative
<br />Rental Rates Holding steady
<br />Highlights
<br />• The Northwest industrial submarket, which is composed of 295 buildings totaling just over 26 million square feet,
<br />is the tightest submarket in the Twin Cities at with vacancy at 9.9%, up slightly from 9.1% at mid-year.
<br />• Absorption, however, took a hit in the Northwest in the past six months, dropping to negative 75,227 sq. ft. from
<br />positive 322,027 sq. ft. at mid-year. Overall leasing activity during the past six months was slow.
<br />• Both bulk warehouse and office warehouse reported negative absorption of 141,913 sq. ft. and 101,535 sq. ft.,
<br />respectively. Despite the lack of activity, the bulk warehouse market still boasted a respectable 9.4% vacancy
<br />(up from 7.6% at mid-year) and office warehouse reported vacancy of 9.2% (up from 8.3%). Prospect lists for
<br />both of these product types were slim.
<br />• Six months ago, there was a lot of uncertainty in the bulk warehouse market with a reported 900,000 sq. ft. of
<br />sublease space expected to come back on the market. While some bulk space did hit the market, it was not as
<br />bad as expected and some of that space is already leasing up.
<br />• Archway Marketing, for example, has 240,000 sq. ft. for sublease in Greenfield, west on Highway 55. However, it
<br />took off the market another 200,000-sq.-ft. sublease in Rogers.
<br />• Wickes Furniture filed bankruptcy, so it's directly leasing its 203,000-sq.-ft. Wickes Distribution Center, 4837
<br />Azelia Ave., in Brooklyn Center. A lease has been signed with Wagner Spray Tech Corp. for 120,000 sq. ft. of
<br />that space. Occupanty will occur in 2008, so this lease will show up in next year's bulk warehouse absorption
<br />numbers.
<br />DBixby Energy Systems Inc. has its 100,000-sq.-ft. facility available for sublease in Brooklyn Park.
<br />• Meanwhile, office showroom was fairly active, holding its own with 168,211 sq. ft. of positive absorption and a
<br />12.2% vacancy rate, down from 14% at mid-year.
<br />• The bright spot in the Northwest was medical technology and life science companies, which continued to thrive
<br />and take new space, primarily office showroom. These types of higher-finish users were most active during the
<br />past six months.
<br />• For example, NeoMetrics Inc., a firm specializing in manufacturing of wire-based products and components to
<br />the medical device industry, signed aseven-year lease for 21,464 sq. ft. of office showroom space at the 80,766-
<br />sq.-ft. Plymouth Corporate Center at 2605 Fernbrook Lane North in Plymouth. In other activity at that building,
<br />Johnson Controls Inc. leased 29,206 sq. ft. for 61 months. Johnson Controls is a manufacturer of automotive
<br />interior systems and automotive batteries.
<br />• In additional leasing activity in the Northwest, Minntech Corp., a Twin Cities-based medical device manufacturer,
<br />signed athree-year deal and doubled its distribution space from 22,000 sq. ft. to 44,000 sq. ft. at the 101,906-
<br />sq.-ft. Plymouth Ponds building, 17300 Medina Road in Plymouth.
<br />• Hedberg Associates inked asix-year lease for 55,000 sq. ft. with Duke Realty Corp. at the Medicine Lake
<br />Industrial Building on Nathan Lane in Plymouth.
<br />• First Industrial Realty Trust signed a 70,000-sq.-ft. lease with portable storage company PODS Enterprises in a
<br />new speculative warehouse/distribution building called Interstate North Distribution Center at 7035 Winnetka
<br />http://outlook.uproperties.com/Screens/IndustriaUNorthwest.aspx 2/4/2008
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