Q1 2019 Industrial Market Insight Report

Industrial Market Trends

  1. 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.
  2. 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.
  3. 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.
  4. 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.

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Market Movement

CompanyTrans. TypeSizeSubmarketBuilding
Asmodee North AmericaNew Lease130,000 SFNortheast435 Park Ct
Crown Iron WorksNew Lease75,000 SFNortheast9859 Naples St. NE
Urban AirNew Lease68,217 SFWest/Northwest3580 Holly Ln. N

Investment Sales

Boone Ave. Distribution Ctr322,750 SFDRA AdvisorsWest/Northwest($40M Portfolio)
Nicollet Business Ctr118,125 SFDRA AdvisorsSoutheast($40M Portfolio)
Cedar Lake Business Ctr50,400 SFDRA AdvisorsSouthwest($40M Portfolio)
Bloomington Business Ctr121,684 SFDRA AdvisorsSouthwest($40M Portfolio)
Diamond Lake Industrial Ctr386,295 SFCabotWest/Northwest$26.1M
Red Rock Business Ctr312,000 SFIndustrial Logistics Property TrustWest/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.