MINNEAPOLIS – July 29, 2019 – The Minneapolis industrial market saw 947,110-square-feet of positive net absorption during Q2 of 2019, according to a new report by CBRE, slightly down from 1 million-square-feet in Q1, resulting in direct vacancy increasing slightly to 4.4 percent compared to 4.3 percent in Q1, while asking rates increased to $6.59-per-square-foot, up from $6.16 in Q1.
A major factor in the positive net absorption was steady Twin Cities employment growth, economic expansion and strong demand for warehousing, bringing total positive absorption to nearly 2 million-square-feet in 2019, eclipsing more than half of 2018’s total positive net absorption.
“The consistent and growing demand for industrial properties, along with positive employment growth in the Twin Cities continues to fuel our strong industrial market,” said CBRE’s Andy Lubinski, senior vice president with CBRE. “While positive net absorption was slightly down from Q1’s 1 million-square-feet, 2019 is well on pace to surpass 2018’s total.”
Construction deliveries remained steady, with 327,222-square-feet of industrial space completed in Q2, with more than 600,000-square-feet of construction scheduled to be completed in Q3, all build-to-suit and in the Southwest submarket.
Leasing slightly declined with 2.4 million-square-feet recorded in Q2, down from 2.6 million in Q1. The Northwest submarket continues its Q1 trend, having the highest portion of transactions at 39 percent, followed by the North Central at 30 percent. Renewals were slightly ahead of new leases with 54 percent of all leasing activity, up from 47.6 percent in Q1.
The largest sale in Q2 was Blackstone Group’s purchase of the 2.4 million-square-foot industrial equities portfolio at $247 million that spans multiple properties across the metro, followed by WPT Industrial REIT’s purchase of the 282,100-square-foot distribution warehouse at 9150 217th Street West for $23.5 million in Lakeville.
A major factor in the positive net absorption was steady Twin Cities employment growth, economic expansion and strong demand for warehousing, bringing total positive absorption to nearly 2 million-square-feet in 2019, eclipsing more than half of 2018’s total positive net absorption.
“The consistent and growing demand for industrial properties, along with positive employment growth in the Twin Cities continues to fuel our strong industrial market,” said CBRE’s Andy Lubinski, senior vice president with CBRE. “While positive net absorption was slightly down from Q1’s 1 million-square-feet, 2019 is well on pace to surpass 2018’s total.”
Construction deliveries remained steady, with 327,222-square-feet of industrial space completed in Q2, with more than 600,000-square-feet of construction scheduled to be completed in Q3, all build-to-suit and in the Southwest submarket.
Leasing slightly declined with 2.4 million-square-feet recorded in Q2, down from 2.6 million in Q1. The Northwest submarket continues its Q1 trend, having the highest portion of transactions at 39 percent, followed by the North Central at 30 percent. Renewals were slightly ahead of new leases with 54 percent of all leasing activity, up from 47.6 percent in Q1.
The largest sale in Q2 was Blackstone Group’s purchase of the 2.4 million-square-foot industrial equities portfolio at $247 million that spans multiple properties across the metro, followed by WPT Industrial REIT’s purchase of the 282,100-square-foot distribution warehouse at 9150 217th Street West for $23.5 million in Lakeville.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
