Concern grows for the future of commercial real estate in downtown Minneapolis
MINNEAPOLIS (FOX 9) – – Experts in the commercial real estate market are concerned about the future of offices and businesses in downtown Minneapolis.
Last week, Target announced it would cease operations in the city center after the lease expired, and now the downtown Angel Food Bakery has announced it is moving to St. Louis Park.
The Future of Twin Cities Commercial Real Estate
In the commercial real estate market, the Twin Cities saw 1.5 million square feet in the 1st quarter through 2021, which experts are calling negative absorption.
“We’re seeing a lot of activity in the downtown market interested in properties around Corridor 394 because they’re interested in better security … I mean, it’s real. It’s very worrying,” said Laura Moore , Vice president of office switching services at Colliers.
In the commercial real estate market, the Twin Cities saw 1.5 million square feet in the first quarter through 2021, which experts call “negative absorption”. Negative absorption refers to office space coming back into the market as tenants do not intend to renew leases.
The goal is 1 million of this area. It’s a huge footprint that Moore says could create more vacancies in the future.
“It’s a bigger picture because it’s not just the office tenants. There are many other companies choosing downtown because of Target. So I’m very concerned that other jobs will fall and change as a result of this announcement,” Said Moore.
Experts say security is a top priority for downtown office space rentals. In order to solve the problem, city officials must deal with it directly.
“It’s about what Minneapolis is doing for the volatility that is going on in the community. I know it won’t be resolved overnight, but the worst that can happen is not addressing it. I feel like it It wasn’t brought up. It was a topic that people don’t like to talk about because it is called what it is and it’s a problem, “Moore said.
Currently, the occupancy rate in office buildings is around 15% to 17%, and while Moore believes an increase in vaccinations will help bring people back, many are re-evaluating their space needs.
There is currently 2.4 million square feet of new property under construction in Minneapolis.