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CBRE <br />MARKETVI EW <br />Minneapolis/St. Paul Industrial, Q1 2016 <br />Development, fundamentals <br />continue push forward <br />Vacancy Rate <br />5.2% <br />Figure 1: Historical Net Absorption vs Under Construction <br />Net Absorption (MSF) <br />8 <br />6 <br />4 <br />2 <br />0 <br />(2) <br />(4) <br />Lease Rate <br />$5.57 PSF <br />2007 2008 2009 2010 2011 <br />r— Q1 <br />Q2 — Q3 — Q4 <br />Source: CBRE Research, Q1 2016. <br />The largest lease transaction of Q1 2016 was Star <br />Exhibits signing to occupy their 200,800-sq.-ft. built -to - <br />suit (BTS) which will break ground in April of this year. <br />Q1 2016 marked the 23rd consecutive quarter of <br />positive absorption for the Minneapolis/St. Paul <br />industrial market. <br />Development continues to boom with Q1 2016 <br />marking the 10th consecutive quarter of at least 2.2 <br />million sq. ft. under construction. <br />Net Absorption <br />633,840 SF <br />*Arrows indicate change from previous quarter. <br />2012 2013 2014 <br />— Total Annual Net Absorption (L) <br />MARKET OVERVIEW <br />Under Construction (MSF) <br />3 <br />2015 2016 YID <br />Under Construction <br />Positive momentum from a record -breaking 2015 <br />carried into Q1 2016 as the outlook for the <br />Minneapolis/St. Paul industrial market remains <br />strong. Lease transactions of all sizes were signed, <br />including five leases over 100,000 sq. ft., signaling <br />the continued demand of large distribution <br />spaces, as well as a go-ahead indicator for more <br />speculative projects in the pipeline to take off in <br />2016. <br />3 <br />2 <br />2 <br />1 <br />1 <br />0 <br />Q1 2016 CBRE Research © 2016 CBRE, Inc. I 1 <br />