Minneapolis–St. Paul

“Go West, young man!” Investors increasingly choose the West submarket

Chart of the week: October 26, 2015

• The West had the lowest office vacancy rate in the metro in Q3 with rents rivaling the Minneapolis CBD. Last week, Artis REIT and Ryan Cos. announced plans to build a speculative 14-story office tower on I-394 next to the Carlson Center in Minnetonka. Early renderings show a total of 317,000 square feet of leasable office space above an executive lobby and climate-controlled parking.

• In Q3, the West saw one of the priciest office sales in its history when the Class A Golden Hills Office Center sold for $36.3 million ($190 p.s.f.) as part of Investors Real Estate Trust’s divestment of its office portfolio. That single sale was almost as substantial as the submarket’s total Q2 office investment sales.

Source: JLL Research

Class A vacancy and rental rates in West submarket

2009 2010 2011 2012 2013 2014 Q3 20150%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

$24

$25

$26

$27

$28

$29

$30

$31

$26.29

$27.89

$27.25

$27.93 $28.04

$28.80

$30.50

14.7%15.8%

17.4%

13.0% 12.8%

9.3% 10.0%

Class A rental rate Class A vacancy