The Star Tribune doesn't have an account with the CoStar Group, the lead provider of commercial real estate data, so I jumped at the chance recently to pick the brain of CoStar's Minneapolis market analyst Michael Roessle and chat all things commercial real estate.
Compared to the other markets that CoStar keeps tabs on across the country, the Twin Cities commercial real estate market typically falls in the middle, Roessle said.
"In general, in terms of rental rates, vacancy rates, fundamentals like that, this market historically and still for the most part tends to be pretty square in the middle of the pack," Roessle said. "It's not the dynamic growth that you may see in coastal markets and it's certainly not the near the bottom."
He added, "This market has really been characterized by its stability and I think that really helps this market weather downturns better than a lot of other markets."
Roessle's assessment of the Twin Cities office scene reflects the flat outlook predicted in other recent local analyses.
"The office market isn't as robust as perhaps the multifamily or even the industrial sector," he said.
A number of office tenants have recently relocated to other buildings, but while that churn creates a lot of leasing activity, there hasn't been much market growth.
While rental rates for newly renovated buildings are rising, the growth isn't marketwide. Competition for tenants is leading property owners to give more concessions for tenant improvements, he said.