Laserfiche WebLink
United Properties Feature: Upsides of Upgrading <br />1tN <br />Page 1 of 5 <br />A Race for Space: Speculative Office Building Begins ~` <br /> C:~ <br />ESI~'H'~S ~If?Ylwu ~ fL••i11.11C#25 ~"s"tYl <br />Increasingly limited options (particularly in Class A space), a relatively healthy economy, growing the nz,mc page <br />companies and some pent-up demand are spurring the launch of a speculative, multi-tenant office <br />development cycle in the Twin Cities. Overall vacancy is 15.2%, and Class A vacancy has dipped <br />below 12%. s~+"~i~~ ~rta~ek~t ally t, a:^.s~a~,r~tt <br />To help meet the demand for larger blocks of contiguous space, more than 1 million square feet is a,. ~»tlj n~ &u~•~ ~~ ~~~ <br />under construction, primarily in the Southwest, Northwest and West submarkets, while the Northeast <br />and South/Airport also are seeing healthy activity. <br /> „ a i ~~ ~ ~_~ r~ <br />It's also expected that at least one new downtown Minneapolis office tower will be announced in 2007 mcrt ?rYi;~r7rat~c.r' <br />-- the first since 2001. <br />'The Twin Cities is in the beginning stages of a development cycle," says Dan Gleason, United ~cc~ auY ~.,.e~ ~~ :'~~'~-~~~~ <br />Properties vice president -office brokerage. 'The market is tightening and there's a limited number of ~,1~rkei F~ep~sis <br />buildings that can accommodate a 100,000-sq.-ft. user in the suburbs. I believe we're getting ready <br />for a slow but steady development run. I also believe we'll see a significant increase in rental rates in <br />2008." <br /> laNl".fi't` ;'"Q7 <br />Rates are gradually increasing, especially in suburban markets where new development is underway. <br />Higher rates are needed to justify rising construction costs. zui~+ cr.,~Fa~ ~ <br />Some tenants are cautious about paying new construction rates and are experiencing some sticker <br />shock. However, in many submarkets, growing companies will have few other options for large blocks <br />of quality space. <br />r <br />~,~ ~ 1<<1 l ~l l~ F A PO .1~~ <br />9 <br />1 ~.. ,~_ _-...e ~ <br />.;.- .~.it., <br />~, ~ - ~ ~ ~ , <br />Under Gonstruttiorr <br />`~ <br />~_ <br /> <br />Submarket Snapshots <br />What's underway? What's in the pipeline? Who's leasing space? Where's the <br />demand coming from? Here's a snapshot of each submarket. <br />Southwest West St._Paul South/Ai~ort <br />lump to: <br />Minneapolis CBD Northwest Northeast <br />Southwest kicks off development <br />An impressive 2 million square feet is under construction or planned in the Southwest. (The overall <br />http://outlook.uproperties.com/features/2007/2007Apri1_RaceForSpace.htm 5/11/2007 <br />