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<br />Industrial hand Boasts Strongest Demand of All
<br />Product Tykes
<br />Loc d t3uners were selhn r mare fu-ms
<br />tO t gus ire homrbiuldcis Bunn the
<br />past te~~t year;. AX~ith the current hous-
<br />ing shrmp, however, landowners today
<br />are looking to industrial developers to
<br />purchase Cheir properties.
<br />"The industrial land market is thrivim~ as
<br />devekrpers coruinue taking land posi~
<br />Lions. hrdustrial space is partit;ulady tight
<br />for large usere;prompting developers to
<br />move forward with spect~Jative develop-
<br />ment. In 2007, I I uuliou square feet of
<br />rretc° iru3usttial space was dehvercd to the
<br />market; 1..082,=}10 sq. ft. is under con-
<br />struction m;u-ket-wide.Another g18;8IO
<br />sq. tt. is planned.
<br />Skyrocketing consnxuaiun and land costs
<br />were deterring developers from starting
<br />new projects. However, the bleak: }rousing
<br />market has helped brine construction
<br />costs down. as industrial developers ;rte
<br />nO lk~nger competing ~i+ith homebuilders
<br />for materials and labor. ALSO, industrial
<br />rental rates increased enough to help
<br />otlset nes~l construction costs. Develop-
<br />ers are b~urkin; ou tenants' acceptance
<br />of these hip*her rate;. Rates increased
<br />on avera>e b`'~~-1%~~:~~ durim> the past two
<br />ye.u-s. Average nes~ consvuction :rckin~
<br />rates art. '> t0 for office space and 55 for
<br />tivarehouse space. Some h.ighet-fhrish
<br />properties are asking 3fi12 surd ~$6. °f his is
<br />significantly higher than the Often-quoted
<br />;y~7 and .b~4.51i for csrstin.`~ space.
<br />INDUSTRIAL SALE PRICES RISING
<br />In ;once case>, industrial land prices have
<br />surpassed residential laud prices ;md con~-
<br />Cinue to increase due to d1e acceptance of
<br />Chis new rate structure, the scarcity of
<br />availably rndustr r rl zoned land, rnd ~ ] uk
<br />of opaom m some Fn-odut t Capes IOr
<br />esatrplc, page blocks of I~tfice shO~~roour
<br />space ate limited market-tivid<.
<br />DEVELOPERS DELVE INTO 'MICRO-
<br />MARKETS'
<br />Industri.il developers are esploriug
<br />subnrarkets and uncovcrin;; "micra-
<br />nrarkets" svitlz limited compei~irrg prixluct.
<br />They reco~uze chat such strategic sites
<br />will put tlrem at a competitive adv;urtage.
<br />They ue lookurg at parts oEM Lyle Grove,
<br />Chanhassen, Chaska, Lakeville, Burnsville;
<br />Blai~re and Apple' Va11ey, for e.xamplc.
<br />NO DEMAND FOR RESIDENTIAL LAND
<br />Twin Cities--area 12e.iltor associations
<br />reported that closed. and pending sales
<br />c'iro}.rped 2L?°~:, in I~oven~iber from one
<br />year ago, and home prices posted their
<br />deepest ylear-over-y-ear decline of 2007.
<br />Tlrc• supply of ness- homes on the mar-
<br />ket ~ilso is dropping. In llecember, the
<br />T3uilders 11 sociation of the Twin t:5t-
<br />ies reported a 30°% decline in total new
<br />units so Liu- in 2~J0?.'I'his excess supply of
<br />homes and lots has forced resideuti.rl ]arrd
<br />s~'alue to drop fit) 5~J°,v Yi'Om their peak of
<br />tsvo yrars a~~O.
<br />SPECULATORS JUMP IN
<br />Speculators arc still active. Some believe
<br />2(108 will be the time to liuy tO capitalize
<br />on current market conditions Aggres-
<br />sive speculators are buying attractive Iand
<br />positions at heavily reduced pricey in
<br />alltlClpatron Ot a reCO~'ery. h.Urli poll Clbni
<br />are being taken metro-wide, including Se.
<br />Michael, h.oger, Otsego, itlaple Grove,
<br />Medina, Corcoran surd Columbus.
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