Minnesota Commercial Association Of REALTORS 2010

Minnesota Commercial Association of REALTORS 2010Annual Market Reportwww.mncar.org

2010 MNCARAnnual Market Report“We’re happy to make our MNCAR Annual Market Report available for the fourthconsecutive year. Data was provided by the MNCAR Exchange and reviewed foraccuracy by the industry experts listed below. We hope it provides you with another toolto better serve your clients and stay informed on the state of the market.”- Dara Rudick, Executive DirectorSpecial thanks to the following MNCAR Market Experts for volunteering to review market data:OFFICEBryan Beltrand Larissa Champeau Anna CoskranWelsh CompaniesNorthMarqNelson, Tietz,& HoyeMatt DelisleBrian HelmkenWelsh Companies CB Richard EllisJohn McCarthyNorthMarqTom StellaNorthMarqINDUSTRIALRyan BartleyCB Richard EllisDuane PoppeColliersAaron SillanpaWelsh CompaniesTom SullivanNorthMarqRETAILJen HelmNorthMarqTim IgoSuntideCommercialAndy McConvilleCB Richard EllisSkip MelinCushman &WakefieldTricia PitchfordNorthMarqSuzie RettingerCBC Griffin

Annual Office Market ReportVACANCY RATES AND ABSORPTION BY SUBMARKET24.3Square 510(400,000)% Vacant0(448,890)5(500,000)0(600,000)Mpls CBDSESWSP CBDSPSuburbanW & NWAVAILABLE BUILDING INVENTORY – SALE & LEASENumber of Listings by SubmarketSale ListingsBUILDING SIZE0-10,000 SF2008 2009Minneapolis CBDSoutheastSouthwestSt. Paul CBDSt. Paul SuburbanWest and NorthwestTOTALS2373336183219236384689224010-25,000 SF2008 20097281633650140938213474216025-50,000 SF2008 200955170131555672006135250-100,000 SF2008 20090454162014224922100,000 SF2008 200930111394100229Lease ListingsCONTIGUOUS SF0-10,000 SF2008 2009Minneapolis CBDSoutheastSouthwestSt. Paul CBDSt. Paul SuburbanWest and 374144510-25,000 SF2008 2009805187187779392805710220768642125-50,000 SF2008 200930274410294018028284310253416850-100,000 SF2008 200914142051819901713216172498100,000 SF2008 2009579391245NOTABLE DEVELOPMENTSNAMEJoffe Corporate Office BuildingOakdale Business Center 5The Offices at West EndKenyon CrossingsCITYMinneapolisOakdaleSaint Louis ParkLakevilleSQ. FOOTAGE170,00040,00033,00025,000LISTING COMPANYNAI WelshStiglich Construction, IncNorthMarqEFH Realty AdvisorsSTATUSU/CU/CU/CU/C868581247

Annual Office Market ReportVACANCY RATES BY 4.525.916.415.010.023.423.616.420.013.3% Vacant25.025.731.330.05.00.0Mpls CBDSESWSP CBDClass AClass BSPSuburbanW & NWClass CAVERAGE QUOTED NET RENTAL RATES BY CLASS20Rental Rate ( )1516.00 15.6012.72 12.3512.07 11.721050Class AClass CClass B20082009

Annual Office Market Report2009 MARKET OVERVIEWTotal Universe SFVacant SF% VacantNet Absorption SFMARKETAvg QuotedRate ( )Avg Op Exp/SFAvg 0920082009Mpls CBDClass AClass BClass 5.152.902.293.16SoutheastClass AClass BClass 3.15SouthwestClass AClass BClass 03.64St. Paul CBDClass AClass BClass 65.057.742.952.605.652.232.732.99St. Paul SuburbanClass AClass BClass 4West & NorthwestClass AClass BClass .60TOTAL MARKETClass AClass BClass 9811,433,888 14,268,65715.518.718,026 (1,437,464)13.4113.046.806.893.133.36

Annual Office Market ReportGROUND RULES This report covers only pure, multi-tenant office buildings in excess of 20,000 square feet. It therefore does not includemedical office buildings, or buildings containing solely government offices. Properties that were designed to be multi-tenant are included in this report even if they have been leased entirely toone tenant. Single tenant leased properties that were developed on a build-to-suit basis, and that would not functionwell as multi-tenant properties, are not included in this report. Owner occupied properties are also not included in thisreport. Rental rates are based on quoted net rates. Actual effective rates will vary. Sale listing counts include individual condo units as single listings. For instance, a 50,000 square foot building divided intofive 10,000 square foot condos, each with a separate For Sale listing, would contribute 5 listings to our listing count totals.DEFINITIONS Existing Projects: Building construction completed prior to December 31st, 2009. Vacant space: Space that is unoccupied and not under lease. Absorption: The positive or negative difference in the amount of space occupied between December 31st, 2008 andDecember 31st, 2009. Space that is physically occupied by a tenant prior to December 31st, 2009, but marketed for lease is consideredoccupied space. Sublease space, either physically occupied or vacant, is considered occupied space in the universe until the leaseruns out. Space occupied by a tenant on a month-to-month lease that is also marketed for lease to a new, long-term tenant isconsidered occupied space. The report does not track “shadow” space, or buildings that are leased by tenants who are not using the space but nottrying to sublease it. Contiguous space: Having a common boundary; space that is directly adjacent to another space or spaces. Average quoted rates were based on single, double, and triple net rates.

Annual Industrial Market ReportVACANCY RATES AND ABSORPTION BY SUBMARKET(75,666)2018.115.2(200,000)Square 0,000)% AVAILABLE BUILDING INVENTORY – SALE & LEASENumber of Listings by SubmarketSale ListingsBUILDING SIZE0-25,000 SF2008 30806618282223110992303830025-50,000 SF2008 20091425371817111143353262014650-100,000 SF2008 200991724613698202791882100-200,000 SF2008 20091857627071110836200,000 SF2008 200913144131215312Lease ListingsCONTIGUOUS SF0-25,000 SF2008 7224221817022993177294280190250109125-50,000 SF2008 200917605743592362475103608234450-100,000 SF2008 200913243329311301533422947166100-200,000 SF2008 200951212138508142112964200,000 SF2008 200914355181355317NOTABLE DEVELOPMENTSNAMENordic Ware ExpansionMinnesota ForkliftInsulations DistributorsBituminous RoadwaysCITYSt. Louis ParkBloomingtonChanhassenMendota HeightsSQ. FOOTAGE80,00064,00050,00020,000DEVELOPERGreiner Construction, Inc.Ryan Companies US, Inc.N/AUnited PropertiesSTATUSCompletedCompletedCompletedUnder Construction

Annual Industrial Market ReportVACANCY RATES BY SUBMARKET AND PRODUCT ortheast7.810.012.911.212.515.715.011.812.310.3% Vacant20.05.00.0EastBulk WarehouseSoutheastOffice ShowroomSouthwestOffice WarehouseAVERAGE QUOTED NET RENTAL RATES BY PRODUCT 4Office4Warehouse4.70Warehouse5.76OfficeRental Rate ( )7.868.390Bulk WarehouseOffice Showroom20082009Office Warehouse

Annual Industrial Market Report2009 MARKET OVERVIEWTotalUniverse SFVacant SF% VacantNet Absorption SFAvg QuotedRate ( )Avg OpExp/SFAvg Taxes/SFMARKET2009200820092008 2009200820092008 2008WH Off2009 2009WHOff2008 20092008 2009EastBulk WarehouseOffice ShowroomOffice 881,66511.217.84.210.311.812.310.311.34.67 6.746.56 10.345.63 8.925.88 NortheastBulk WarehouseOffice ShowroomOffice 25 lk WarehouseOffice ShowroomOffice 53 8.375.51 12.454.47 8.584.74 9.471.29 1.261.97 11.361.72 1.751.70 4.011.522.271.631.801.552.451.831.93SoutheastBulk WarehouseOffice ShowroomOffice Bulk WarehouseOffice ShowroomOffice AL MARKETBulk WarehouseOffice ShowroomOffice 9.615.812.912.5(50,382) (1,442,518)(589,267)90,880(303,576) .141.6611,604,295 15,403,07110.413.6(943,225) 98(168,772)(75,666)

Annual Industrial Market ReportGROUND RULES Multi-tenant office warehouse, office showroom, and bulk warehouse buildings in excess of 25,000 square feet. Singletenant leased properties that were developed on a build-to-suit basis, and that would not function well as multi-tenantproperties, are not included in this report. Owner occupied properties are also not included. Rental rates are based on quoted net rates exclusive of transaction costs. Actual effective rates will vary.DEFINITIONS Existing Projects: Building construction completed prior to December 31st, 2009. Vacant space: Space that is unoccupied and not under lease. Absorption: The positive or negative difference in the amount of space occupied between December 31st, 2008 andDecember 31st, 2009. Space that is physically occupied by a tenant prior to December 31st, 2009, but marketed for lease is consideredoccupied space. Sublease space, either physically occupied or vacant, is considered occupied space in the universe until the leaseruns out. Space occupied by a tenant on a month-to-month lease that is also marketed for lease to a new, long-term tenant isconsidered occupied space. The report does not track “shadow” space, or buildings that are leased by tenants who are not using the space but nottrying to sublease it. Contiguous space: Having a common boundary; space that is directly adjacent to another space or spaces. Average quoted rates were based on single, double, or triple net rates.PROFILE OF PROJECT TYPESProject TypeOffice WarehouseOffice ShowroomBulk WarehouseTypical Tenant Size7,000 Sq. Ft. 3,000 Sq. Ft. 20,000 Sq. Ft. Clear Height16-24 Ft.12-16 Ft.20 Ft.Bay Depth120-160 Ft.80-120 Ft.160-200 Ft.Office/Showroom10%-40%25%-75%0%-10%

Annual Retail Market ReportVACANCY BY CENTER Square 0001,000,000600,0001510.4800,0008.2498,798% RegionalNeighborhoodAVAILABLE BUILDING INVENTORY – SALE & LEASENumber of Listings by Center TypeSale ListingsCENTER TYPENeighborhood Centers2008 200936Community Centers200820094912Regional Centers2008 2009202Downtown Retail2008 2009307Lease ListingsCONTIGUOUS SFNeighborhood CentersCommunity CentersRegional CentersDowntown Centers0-10,000 SF2008 20092886915830868174510-25,000 SF2008 2009563263572371425-50,000 SF2008 200917153015105450-100,000 SF2008 200938000601100,000 SF2008 200912000201These counts include listed properties on the MNCAR Exchange within the seven-county area and uses the Center Typesassigned to properties there. These do not match the center types used for generating vacancy and rate statistics in all cases.NOTABLE DEVELOPMENTSNAMEThe GroveThe Fountains of Arbor LakesArgenta HillsWater’s Edge at Pine LakesCITYMaple GroveMaple GroveInver Grove HeightsSartellSQ. FOOTAGE550,000492,349380,000100,000LISTING COMPANYWelsh CompaniesNorthMarqWelsh CompaniesMeyer CommercialCONSTRUCTION STATUSU/CU/CU/CU/C

Annual Retail Market ReportAVERAGE TOTAL EXPENSES BY CENTER TYPEExpenses ( borhoodRegionalQUOTED NET RENTAL RATES BY CENTER TYPE30Rental Rate ( dRegional

Annual Retail Market Report2009 MARKET OVERVIEWTotal Universe SFVacant SF% VacantAvg QuotedRate ( )Avg Op Exp/SFAvg .723.0721.0010.8310.263.744.23CBDs18,991,405 17,240,145 1,140,353 9.010.416.4116.703.343.333.463.73Neighborhood 21,566,616 22,352,883 1,950,038 2,324,63720,205,646 21,681,191 1,070,421 OTAL 18.92These figures do not take sublease and “shadow” space into account.17.443.823.703.923.91

Annual Retail Market ReportGROUND RULES Multi-tenant retail properties in the 7-county metro area in excess of 30,000 square feet. Rental rates are based on quoted net rates exclusive of transaction costs. Actual effective rates will vary.DEFINITIONS Existing Projects: Building construction completed prior to December 31st, 2009. Vacant space: Space that is unoccupied and not under lease. Absorption: The positive or negative difference in the amount of space occupied between December 31st, 2008 andDecember 31st, 2009. Space that is physically occupied by a tenant prior to December 31st, 2009, but marketed for lease is consideredoccupied space. Sublease space, either physically occupied or vacant, is considered occupied space in the universe until the leaseruns out. Space occupied by a tenant on a month-to-month lease that is also marketed for lease to a new, long-term tenant isconsidered occupied space. The report does not track “shadow” space, or buildings that are leased by tenants who are not using the space but nottrying to sublease it. Contiguous space: Having a common boundary; space that is directly adjacent to another space or spaces. Average quoted rates were based on single, double, or triple net rates.PROFILE OF PROJECT TYPESRegional Center: 400,000 square feet and upCommunity Center: 150,000-399,999 square feetNeighborhood Center: 30,000-149,999 square feetCentral Business Districts of Minneapolis & St. Paul: Regardless of square footage