Q1 2019 Industrial Market Insight Report
Industrial Market Trends
- The Industrial market remains strong after its 34th consecutive quarter of positive net absorption. Developers remain bullish on the economy, leading to an increase in speculative projects across the metro.
- Interest from out of state investors remains high in the Twin Cities. The Midwest is more affordable overall, lower property taxes and a more diverse economy.
- The rise of e-commerce continues to drive the industrial market locally, as well as on a national scale. Customers expect timely deliveries making it necessary to establish local distribution hubs as seen by e-commerce giants Amazon, Wal-Mart and Target.
- Increased development in urban areas has forced many manufactures and distributors to the edges, away from more desirable labor pools. In a tight labor pool, this trend has put a higher degree of importance on labor and logistic studies during the site selection process.
(click to enlarge)
|Asmodee North America||New Lease||130,000 SF||Northeast||435 Park Ct|
|Crown Iron Works||New Lease||75,000 SF||Northeast||9859 Naples St. NE|
|Urban Air||New Lease||68,217 SF||West/Northwest||3580 Holly Ln. N|
|Boone Ave. Distribution Ctr||322,750 SF||DRA Advisors||West/Northwest||($40M Portfolio)|
|Nicollet Business Ctr||118,125 SF||DRA Advisors||Southeast||($40M Portfolio)|
|Cedar Lake Business Ctr||50,400 SF||DRA Advisors||Southwest||($40M Portfolio)|
|Bloomington Business Ctr||121,684 SF||DRA Advisors||Southwest||($40M Portfolio)|
|Diamond Lake Industrial Ctr||386,295 SF||Cabot||West/Northwest||$26.1M|
|Red Rock Business Ctr||312,000 SF||Industrial Logistics Property Trust||West/Northwest||$27.7M|
The Minneapolis/St. Paul Office Market is a diverse, stable market with an unemployment rate of 2.2% and projected GDP growth that is expected to continue to outperform the national economy. Minneapolis/St. Paul, collectively referred to as the Twin Cities, is the 16th largest MSA with approximately 3.6 million residents and home to 19 Fortune 500 public companies’ headquarters. The Twin Cities is also ranked highly for quality of life, labor force participation, health care and workforce quality.