The Twin Cities commercial real estate market trucked along at a slightly slower, but still healthy pace during the first half of the year, according to Cushman & Wakefield/NorthMarq’s recently released Compass report.
The vacancy rate for multitenant office, industrial and retail buildings rose to 10.8 percent, slighter higher than at the end of both 2016 and 2015.
“The Twin Cities multitenant market isn’t moving with the urgency or intensity of recent years, but demand and activity have remained remarkably strong throughout the first half of this year,” Mike Ohmes, an executive vice president at Cushman, said in a statement. “A more careful approach by developers and end-users has caused our transaction volume to be lower than expected so far this year, but we project a much more active second half of the year.”
Overall, more than 332,000 square feet of additional commercial space has been absorbed or filled, most of which was industrial. Retail experienced an uptick in vacancy as retailers nationally have struggled. The office market continued to recover with more than 82,000 square feet of positive absorption.
Despite these modest numbers, real estate experts expect the second half of the year to be more vigorous with an increase in transaction volume, new construction and absorption.
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