Minneapolis Industrial Sees 18% Year-Over-Year Increase in Positive Net Absorption Through 2019

07 Jan 2020

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MINNEAPOLIS – Jan. 7, 2020 – The Minneapolis industrial market saw 622,856-square-feet of positive net absorption during Q4 of 2019 according to a new report by CBRE, bringing 2019’s total absorption to 3.8 million-square-feet, an 18% increase year-over-year. Direct vacancy held steady at 4.4% and the overall blended asking rate closed out 2019 at $6.46-per-square-foot.

A major factor in the positive net absorption seen in throughout the year despite the potential economic uncertainty through portions of 2019 was steady Twin Cities employment growth and economic expansion, with Minneapolis having the eighth-lowest unemployment in the country at 2.9%.

“While much of the country was anticipating an economic downturn, the Twin Cities continued to grow economically through the entire year,” said CBRE’s Tom Bennett, first vice president in Minneapolis. “This consistent growth, along with low vacancy rates and growing demand for industrial properties, created an industrial market with absorption that was amongst the best of the decade.”

In construction, deliveries decreased in Q4 with 431,702-square-feet of industrial space completed, down from 993,890-square-feet in Q3 and totaling 2.2 million-square-feet for the year. While deliveries are at their lowest number since 2013, 2020 is set to surpass 2019’s total with 2.9 million-square-feet of industrial space currently under construction and scheduled to be completed by the end of the year.

Leasing saw a decline with 1.254 million-square-feet recorded in Q4, down from 2.4 million in Q3, bringing 2019’s total to 8.254 million-square-feet. The North Central submarket accounted for just under a third of leasing activity at 32%, followed by the Northwest submarket at 30%.

The largest sale in Q4 was Link Industrial Properties’ purchase of the 2.8 million-square-foot Colony portfolio for $237 million that includes 18 properties in the Twin Cities, followed by AEW Capital Management’s purchase of the 472,323-square-foot Minneapolis Core Industrial portfolio for $37 million that includes two properties in Savage and Shakopee.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of 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.