Haves vs Have Nots In the Office Space Market
The Minneapolis Office Space market has a unique trend happening. Certain sections of the metro are seeing significant rent growth, a dramatic reduction in available space, and a certain amount of buzz. Most notably the West End and North Loop areas. However, this is not the case in most subsections of the market as many buildings are struggling to just to get a showing.
Can Independent Firms Compete with Corporate Giants in Commercial Real Estate?
Working under the umbrella of some of the CRE industry’s biggest names has some obvious benefits. However, there are also compelling reasons why boutique commercial real estate brokerage firms remain an excellent choice.
Independent brokers have some distinct advantages over their large competitors. They can do business without the bureaucracy of a large organization or corresponding conflict of interest. They can be more nimble, make swift decisions, retain local control of marketing, and push the use of new technology. When put to effective use, this agility translates into more customized solutions, responsive customer service, and a better experience.
The smaller firms, such as CRE Partners, have always taken great pride in offering personalized service and local market expertise. Digital tools now allow them to bring the same data and technology as their large counterparts. Independent firms can take advantage of CRMs, social media and other specialized digital tools to more efficiently provide clients with the information they need. You don’t have to be at a major firm to use and directly benefit from these tools.
The path commercial real estate success is not necessarily the size of the firm – hard work, innovation, integrity and true market knowledge are more important. For business and property owners looking for more from their commercial real estate broker, do your research. The best in any market are not hard to identify and what you find might just surprise you. Don’t count out the local Minnesota commercial real estate experts!
Should You Use a Broker? Or Go At It Alone?
It really depends on whether or not you rather spend your time on your business or searching for space. There are many considerations when deciding if you are going to move, add another location, or just stay put. Why should consider using a Minneapolis Tenant Representation Broker?
In a recent Inc. Magazine article, commercial real estate & office space was a significant conversation. One of the best quotes from this: “When you have a separate location, there’s an initial upfront cost, but there’s also overhead you take on by having to communicate between multiple locations. ALSO, ONE THING I THINK A LOT OF SMALL BUSINESSES DON’T REALIZE IS THAT LOOKING FOR A NEW OFFICE IS A HUGE TIME SUCK. We were running out of space, and it took us more than six months to find another office.” (Inc. Magazine; Jerry Hum)
Bottom line, it takes a lot of time out of your day for more important tasks. That is why we are here to help!
Take advantage of our ability to streamline the space search, our market knowledge, our negotiating skills, and our ability to manage the transaction to SAVE YOU TIME & MONEY.
What You Should Know About HVAC
Touring space? Know this…
What should you look for when touring commercial real estate? Yes, the proposed space is important, but consider these other factors.
With SF/person going down, does this building have enough parking? View tenant parking areas and compare it to the buildings occupancy. If the parking is full and only 80% of the building is full, you know you are in for some issues.
Don’t underestimate the need for sunlight. Getting cheap space with limited natural light may seem like a cost savings, but it will hurt you in the long run. Talented employees generally want assess to light as it will improve satisfaction with the job, increase productivity and help with overall health.
When comparing CAM, be very leary of the least expensive option. In the long run, not maintaining the property correctly will come back to bite you. Look for buildings with reasonable CAM, as they may provide additional amenities that may ultimately save you money (fitness centers, shared conference rooms, less SF)
Commercial Real Estate Bubble?
I often get asked “How are things going in the Commercial Real Estate market“? This is a tough question to answer. Yes, many people and many aspects of CRE is doing very well. However, a dark cloud is growing in the distance as the apartment building boom continues, institutional grade investment prices rise, and cap rates compress. My opinion is that we are nearing or already in a bubble…and I am not alone. U.S. Bancorp CEO Richard Davis “wants to hold the line on how much exposure the bank has to a market that he says often carries too much risk”. The key in this statement is too much risk with returns not justifying that risk. Low interest rates and a flood of cash being pumped into the system have made commercial real estate look attractive compared with bonds and other assets and have “drawn comparisons to the delirious boom of the mid-2000s” (Source WSJ). So where do we go from here? I don’t the answer. All I know is, we very rarely learn from past mistakes.
The Minneapolis Warehouse Space Market is Booming!
Oh how things have changed. It is finally good times for everyone involved with Industrial Real Estate in Minneapolis/St Paul. Over the last 12 months, there has been almost 2,000,000 SF absorbed in the overall market. Even with that surge in demand, vacancy rates have remained flat as developers were ahead of the curve and had a number of new speculative properties ready to accommodate new tenants.
Will this torrid pace continue? Developers, investors and brokers sure hope it will, but we do expect this going into 2016. We do expect the industrial real estate market to remain healthy and the following trends to continue:
- rental rates increasing
- cap rates lowering/flattening
- significant influx of investment capital looking at every available portfolio
- development community will continue building, filling, and selling their developments.
If you are in need of additional warehouse space, we can help. Please contact us today!
Office Space for Tech Companies
There was a recent article in the Twin Cities Business magazine describing the Minneapolis North Loop Office Market as one of the top growing office submarkets for tech companies in the US. This growth has caused rental rates to increase by over 20% in the last two years alone. This make sense as companies try to retain & attract talent by having well located, creative office space. This area will continue to grow through the development of new housing options and spec office buildings. If you are a growing tech company and would like to research office space in the North Loop, give a call today!
Commercial Real Estate Consulting Humor.
We have all been there, so here is a quick laugh before you walking into your next pitch!