Colliers International Features the North Loop in Their Quarter 2 Report
Minneapolis-St. Paul Research & Forecast Report | Quarter 2 | Office | Colliers International
Spotlight Trends: Identifying Tenant Hotspots
With its low vacancy and popular locale, the North Loop has drawn the notice of developers.
The vacancy rate is 6.8 percent, compared to 12.7 (UPDATE FOR Q2) percent for the entire Minneapolis CBD. One of the most notable North Loop developments is T3, a 210,000-squarefoot speculative office building from Hines. T3,
Offices @MOA, and Mosaic in Uptown are the only multi-tenant office properties constructed speculatively so far in this office development cycle. There is an additional 870,000 square feet of office space in four buildings planned in the North Loop. Challenges facing office properties in the neighborhood include limited parking and lack of skyway access.
> Of the new multi-tenant office construction we are tracking in the North Loop, T3 will have the advantage of being the first to be completed. Hines began construction in November of 2015 on the 210,000-square-foot building that is expected to be completed this fall. The property features wooden construction materials,
rather than steel or concrete, to create a historic vibe that fits in with the centuries-old neighborhood. Modern amenities such as collaborative, open floor plans, a rooftop deck, and a fitness center will provide the modern amenities tenants are looking for.
The importance of being open to lease rates that are in line with rates that tenants see as they look throughout the market cannot be overlooked.
> Schafer Richardson is developing a Class A office property a short distance from Target Field Station. They are planning a 11–story, 200,000 square foot building with 4,500 square feet of retail space. The property, located at 700 North 5th Street, will be called @mosphere, and currently has a warehouse building on it,
which Schafer Richardson plans to tear down. Weather-Rite, an HVAC company, is the only tenant, and their lease expires in 2017.
> Local developers Ned Adbul and CPM have proposed a 10-story office building on a parking lot immediately south of the Internet Exchange Building they purchased at 419 Washington Avenue
North.
> United Properties has a 0.67-acre site located at 753 Washington Avenue North, and is planning an office building up to 10 stories and 200,000 square feet. The site is just west of the Loose-Wiles building, which United Properties renovated in 2013. United Properties has also been working with Greco, LLC, on potential
multifamily developments in the area.
> United Properties has another office building in the works in the North Loop with NoLo, a 10-story, 240,000-square-foot planned project near Target Field Station.
How to Compete?
Owners can add amenities including upgraded common areas, restaurants, bike storage and repair, and communal gathering spaces. Prepared suites and common areas that tenants can walk through will help potential tenants to visualize adaptable, engaging workspaces.
The planned Southwest Light Rail Transit project, which will run from downtown Minneapolis through
St. Louis Park, Hopkins, Minnetonka, and Eden Prairie and pass in close proximity to Edina, will bolster
the ability of some suburban office areas to provide transit access. Preliminary approvals have occurred
for the project with construction scheduled to take place between 2017 and 2019 and service to begin in
2020.