Laserfiche WebLink
CBRE <br />MARKETVIEW MI <br />NEAPOLIS/ST. PAUL RETAIL <br />LUXURY HOTELS, SHOPPING MALLS TO <br />HEADLINE 2016 CONSTRUCTION MARKET <br />While new construction dipped a bit in the <br />winter months of Q1 2016, the Minnesota <br />Department of Employment and Economic <br />Development (DEED), reported that construction <br />employment numbers are up 5% since 2014, <br />indicating a stable market. <br />High -end luxury stores are surging across the <br />U.S. This has caught the attention of investors, <br />who are now targeting Class -A retail assets that <br />may attract high -end tenants. Due to the high <br />demand for these properties and a relatively low <br />supply in the Minneapolis market, developers <br />expect to remain competitive through 2016, <br />targeting value -add assets. <br />This quarter's construction market was again <br />highlighted by Central Park Commons, a <br />434,100- sq.-ft. development in Eagan. CSM's <br />flagship project, which is expected to be <br />completed in Q4 2016, highlights a local and <br />national trend of open-air, "one -stop" centers <br />where consumers can combine shopping and <br />social activity. <br />On the heels of its 150,000-sq.-ft. addition in <br />2015, Mall of America is expected to capitalize on <br />this trend in 2016 as it hopes to move forward <br />with its plans to expand to the former site of Met <br />Stadium. Bloomington officials say this addition <br />is part of the plan to create a "South Loop" <br />district surrounding the historic mall. <br />A number of retailers are signing leases at <br />Woodbury's City Place, a 150,000-sq.-ft. <br />development which is currently in its second <br />phase of construction. The tenant roster thus far <br />includes a variety of restaurants and a cycling <br />studio. <br />Menards in Brooklyn Park proceeded to make <br />progress on its two-story, 211,000-sq.-ft. <br />renovation plans, and hopes to break ground in <br />Q2 2016. <br />Figure 6: Retail Construction Completions <br />0 <br />1.6 <br />1.4 <br />1.2 <br />1.0 <br />0.8 <br />0.6 <br />0.4 <br />0.2 <br />0.0 <br />i.IIi1L.. <br />2009 2010 2011 2012 2013 2014 2015 2016 <br />Source: CBRE Research, 01 2016. <br />Figure 7: Construction Employment in MN <br />150 <br />0 <br />0 <br />100 <br />50 <br />0 <br />(=> CV C+) L(-) .O <br />O O O <br />O O O O O O O O O O <br />CV CV CV CV CV CV CV CV CV CV <br />C3 C3 C3 C3 C3 C3 C3 C3 C3 C3 <br />Source: Bureau of Labor Statistics, 2016. <br />Figure 8: Notable Twin Cities Retail Construction Projects <br />Project <br />Sq. Ft. Submarket <br />Central Park Commons 434,100 <br />Menards Brooklyn Park 211,000 <br />City Place 150,000 <br />Shingle Creek 106,000 <br />Hy-Vee Lakeville 98,000 <br />Bielenberg Gardens 70,000+ <br />Source: CBRE Research, Q1 2016. <br />Eagan <br />Brookdale <br />Woodbury <br />Brookdale <br />A.V. - Lakeville <br />Woodbury <br />Q1 2016 CBRE Research © 2016 CBRE, Inc. I 4 <br />