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How Can Minnesota Apartment Developers Access Capital While Minimizing Risk? Structured Finance

The Twin Cities of Minneapolis and St. Paul continue to be a very attractive marketplace for multifamily investing due to an average vacancy across the metro of 3.1 percent, as well as average 2019 rent growth of 5.8 percent, according to a recent report issued by Marquette Advisors. The Twin Cities currently has nearly 30,000 multifamily units in the development pipeline that are expected to be delivered between 2020 and 2022. With all of this development activity and an abundance of local …

Influx of Out-of-State Capital Creates Cap Rate Compression in Twin Cities Market

In 2019, the Twin Cities net lease retail market experienced a historic year, benefitting significantly from aggressive western U.S. capital. The Twin Cities saw an unprecedented number of buyers from the western United States who were willing to pay a premium above local buyers for quality net leased real estate. There were 95 net lease transactions in the Twin Cities in 2019 that sold below a 7.5 percent cap rate, according to CoStar Group. Of those transactions, 33 percent were sold to …

Strong Mix of Fortune 500 Companies Helps Fuel Growth of Twin Cities

Even in the context of a sustained stretch of national economic growth and a Midwest region where there are plenty of high-performing markets, Minneapolis-St. Paul stands out. The commercial real estate market in and around the Twin Cities is thriving, in large part due to some impressive structural fundamentals. Metrics and measurables The state of Minnesota — especially the Minneapolis-St. Paul metro area — has a very diverse base of employment, with a long list of significant Fortune …

Strong Economy, Low Unemployment Drive Twin Cities Office Market Success

Our Twin Cities office market remains strong as the population of millennials and empty nesters continues to migrate to first- and second-ring areas, bringing revitalization and new investment into the city’s commerce and infrastructure. With vacancies remaining exceptionally low and fewer developments on the horizon, rents have shown consistent growth. We are seeing fewer new buildings under construction for single-tenant users. Most are geared toward multi-tenant, mixed-use …

Mixed-Use and Apartments: Is There Still Room for Growth in the Twin Cities?

As a team, we work heavily in mixed-use leasing and development sourcing. Our team handles the commercial leasing on many mixed-use projects within the Twin Cities market, where we also source and find locations for mixed-use apartment developers. This article will give a current snapshot of the mixed-use retail and apartment market within the Twin Cities. What types of projects? There are many three- to six-story, podium-style apartment buildings popping up all over the urban areas of …

Twin Cities’ Apartment Market Poised for a Strong 2019

The Twin Cities apartment market is historically characterized by high occupancy and minimal volatility, with consistent and solid year-over-year rent increases, minimal concessions and a sustained vacancy rate well below 5 percent. As a result, there is abundant interest from investors and lenders alike to place capital in the Twin Cities.  The lending environment for Twin Cities’ apartment owners appears poised for another great run in 2019, with all lender types having a large …

To Attract and Retain Tenants, Office Landlords Get Creative in Minneapolis

Stakes are rising in the war for talent, and employers are using amenity-rich real estate to win the hearts and minds of the brightest young recruits. Determined to outflank the competition, companies are increasingly focused on occupying buildings with the best available on-site features, proximity to nearby amenities, and the elusive “cool” factor.  Competition escalates To heed the call for better offerings, landlords in Minneapolis have begun to offer unconventional …

Industrial Owners Find Success in Reinventing Flex and Showroom Spaces

The most active commercial real estate category in the Twin Cities metro area over the last several years, in terms of leasing activity and new construction sales, has been industrial product. New construction has been trending toward office warehouse and bulk buildings with higher clear heights, as tenants are implementing new racking systems and growing upward to optimize their space. On the surface, this trend may sound like it will leave behind the lower-clear height flex and office …

Influx of Supply Begins to Impact Minneapolis Multifamily Market

Like several other markets across the country, the Twin Cities is experiencing the peak of the post-recession construction cycle. However, the traditionally tight multifamily market is in one of the best positions to absorb new units. In fact, Minneapolis-St. Paul has consistently reported one of the lowest vacancy rates in the nation due to a strong economic base and pent up demand for new units. Metro Minneapolis is the second-largest economic center in the Midwest and the local economy …

Future Is Bright for Senior Living Development in the Twin Cities

Exciting times are in store for the senior living industry. A massive generation of baby boomers is entering the golden years of retirement and beyond, driving a wave of demand for seniors housing. The U.S. Census Bureau estimates 78 million baby boomers were born between 1946 and 1964. The youngest boomers are 54 this year and the oldest are 72, so we are just eclipsing the front end of the wave. [caption id="attachment_198293" align="alignright" width="100"] Matt Rauenhorst, Opus …

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