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Table 5-4
<br /> TWIN CITIES AREA OFFICE MARKET;4TH QUARTER 2011
<br /> Total Vacant Vacancy Rent Rate
<br /> Submarket Sq.Ft. Sq.Ft. Rate Class A Class B
<br /> CBD
<br /> Minneapolis 28,299,243 4,074,715 16.0 % $ 23.33 $ 18.06
<br /> St.Paul Midway 10,059,518 1,840,810 20.7 23.02 17.84
<br /> CBD Total 38,358,761 5,915,525 17.2 % $ 23.27 $ 17.96
<br /> S uburban
<br /> Northeast 2,387,967 507,669 21.3 % $ 22.20 $ 20.05
<br /> Northwest 5,380,557 947,703 17.6 24.99 17.95
<br /> Southeast 4,406,797 782,744 17.8 19.33 18.97
<br /> Southwest 19,859,628 3,643,585 18.3 24.37 20.27
<br /> Suburban Total 32,034,949 5,881,701 18.4 % $ 23.49 $ 19.68
<br /> Total Twin Cities Area 70,393,710 11,797,226 16.8 % $ 23.39 $ 18.79
<br /> Source: Grubb&Ellis.
<br /> The Northstar Corridor is in the Northwest office submarket, which makes up 16.8 percent of the
<br /> suburban submarkets, and about 7.6 percent of the Twin Cities area office market. The
<br /> Northwest submarket is the second largest suburban submarket in the Twin Cities area, but is a
<br /> quarter the size of the Southwest submarket. The Northwest submarket has approximately 5.4
<br /> million square feet of multi-tenant office space. The vacancy rate in the Northwest submarket
<br /> was 17.6 percent at the end of 2011, which is lower than the suburban average of 18.4 percent,
<br /> but higher than the overall Twin Cities area average of 16.8 percent. The Twin Cities area average
<br /> rental rate for Class A office space in the Northwest submarket was $24.99 per square foot, which
<br /> is the highest of all the submarkets.
<br /> Office rents are well below the Twin Cities area average of$19 per square foot, ranging from as
<br /> low as $3.00 to $19.00 per square foot on current listings, as shown in Table 5-5. Due to the low
<br /> rental rates, the market does not support speculative office development.
<br /> Table 5-5
<br /> RAM SEY OFFICE RENTAL RATES
<br /> (Per Square Foot)
<br /> Net Space
<br /> Rent Expenses Taxes Available
<br /> 7100 Sunwood Drive $425-$825 $ 1.50 $ 1.24
<br /> Energy Business Park $3.90-$4.00 $ 1.40 $ 1.72 18,516
<br /> McKinley Building $4.00-$8.00 $ 1.02 $ 1.65 4,615
<br /> Ramsey Business Park $4.00 $ 1.50 $ 1.76 4,475
<br /> Thurston Business Center $3.00-$6.50 $ 0.91 $ 2.02 28,610
<br /> Ramsey Office Plaza. $19.00 8,762
<br /> 14391 Azurite $15.00 2,641
<br /> Riverview Office Suites $9.50 3,920
<br /> Source: Loopnet,Northmarq,and McComb Group,Ltd-
<br /> 5-4
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