The US suburban office market in Minneapolis is proving attractive to those looking to invest in property. According to recent reports, conditions are favourable to buyers and there are plenty of deals to be had, as long as individuals are willing to play the game. Lindsey Charton's Burnsville insurance agency told The Star Tribune: "If you're willing to walk away from a deal, they're willing to give you what you want to get you to say yes."
What's more, with plenty of prime space available, it seems as though investors will be spoilt for choice. The newspaper reported that preliminary figures from Cushman & Wakefield/NorthMarq have shown that demand is still below par. In the southwest metro area – the largest suburban office market in the region – the vacancy rate in 2012 dipped to 17.2 per cent from 17.7 per cent in 2011, with newer top-tier office buildings enjoying the lowest vacancy rates throughout the Twin Cities.
The market in Minneapolis also benefits from several big chunks of available space, including the former offices of Delta Air Lines and Blue Cross and Blue Shield in Eagen; Alliant Techsystems Inc. in Eden Prairie, and; State Farm Insurance in Woodbury. Such units are likely to be redeveloped for a new purpose, like the former Lockheed Martin office complex in Eagan, which is now a lifestyle shopping centre, according to The Star Tribune.
Suburban office market success is being supported by the strong performance of all commercial real estate in the area. Cushman & Wakefield/Northmarq's latest semi-annual Compass Report, which analyses the Minneapolis-St.Paul scene, revealed that during the first half of 2012 the Twin Cities commercial real estate market continued to show signs of recovery. Vacancy levels declined to 14.2 per cent (15.3 per cent with sublease space) across all property types, with 1.7 million square feet of positive absorption. This is the lowest rate since 2010.
Mike Ohmes, executive vice president, Transaction and Advisory Services, explained that the data provided optimism to the sector, with industrial properties experiencing the most growth. Retail, medical office and multi-family investment sectors also performed well.