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Q3 08 Q4 08 <br />Actual Estimazed <br />VACANCY RATE ~ T <br />NET ABSORPTION -~ -~ <br />CONSTRUCTION ~ T <br />RENTAL RATE T ~ <br />SIGNIFICANT TRANSACTIO~~J <br />.:. <br />~wr«~ ~„ <br />a^~ <br />Carmen Distribution Center <br />Inver Grove Heights, MN <br />Buyer: TA Associates Realty of Boston <br />Seller: Capri Capital Advisors <br />Size: 174,2b7 SF <br />Price: $37 PSF <br />TURLEY <br />MARTIN <br />TUCKER <br />Commercial Real Estate Services <br />As Autumn Dawns, Industrial Market Continues to Fall <br />The T~Tin Cities industrial market experi- <br />enced negative absorption f~~r the third con- <br />secutive quarter, with ne~;ativc absorption <br />of 333,430 Sk for the quarter and. negative <br />870,364 Sh for the year. <br />The negative absorption has l.eil to the avail- <br />ability of numerous options orr the market. <br />It is truly a renter's market at this tune, as <br />t >earch for available spate reveal; s<:~ many <br />options that the. tenant can bey very selective <br />about «.here they wish to locate. Landlords <br />G~~itl~t i7ritr e locatt<ns cats still fill therrva~-art- <br />ciesquickly, but those not as i~ort unite must. <br />find additional ways to convince tenants to <br />i:orne tlrrouglt their s7;tar.e and sigh ort tlr.e <br />dotted line. <br /><<lnodter s:hallenge for tl~te txrarket is tl~te in- <br />crease in sublease space. hherer is close to <br />2,000,000 SF of sublease space on the mar- <br />ket. That is twice as ntuc:lt as the 987,0(}0 <br />Scott County 13.4% <br />Southwest Sector 9.6% <br />St. Paul ~.I% <br />Dakota County '.3% <br />Twin Cities Metro ~b.b% <br />Washington County 6.3% <br />Anoka County 4.5% <br />Minneapolis 4.3% <br />Northeast Sector ~.7% <br />Northwest Sector 3.b% <br /> 5~,...~ t .~~,s <br />SF of sublease on the market a year ago and <br />alrnc>st tl~tree time, as tnutat as tl e (34,000 <br />~1" {Tl)Tn 1: Y~~0 yt. ir5 ago. <br />One potential. positive poirtr for industrial. <br />owners is somethuir~ called the "oil fac- <br />tor." As described in an article in the Star <br />Tribune, tyre higher cost of oi.1 is ]raving <br />a positive atEect on local matntfact:uring. <br />Many companies shifted. operations to Asia <br />in ardec to leverage cheap Ialtor, but over <br /> ~~ <br /> 13 <br /> I <br /> <br />,~ <br />,_. <br />s <br /> ' ' <br />,3 <br />r~ _ .. . <br />9 <br />QI Q2 Q3 Q4 QI Q2 Q3 Q4 QI Q2 Q3 Q4 Q1 , Q2 Q3 Q4 QI ' Q2 Q3 <br />2004 2005 200b 2007 2008 <br />~ Absorption Vacancy Rate <br />INDUSTRJAL ~ THIRD QUARTER ~ 2008 <br />..~~i?~~Nr~~ ~~.,::~a <br />MARKET INDICATc~RS <br />