HomeMy WebLinkAbout5.c. Updates and Information 4 ROSEMOUNT EXECUTIVE SUMMARY
CITY COUNCIL
Port Authority Date: May 15, 2012
AGENDA ITEM: Updates and Information AGENDA SECTION:
New Business
PREPARED BY: Kim Lindquist, Deputy Director AGENDA NO 5.c.
ATTACHMENTS: Greater MSP Information, CBRE Update, APPROVED BY:
Market Updates
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RECOMMENDED ACTION: Information Items
UPDATES AND INFORMATION
As the Port Authority will recall, Rosemount is a member of the Greater MSP organization. The
Mayor and Deputy Director attended the Spring Investor meeting this week. At the meeting the
annual report was distributed. Within the report, which is in the packet, it is noted that the Key
Industry Sectors being targeted by Greater MSP ate:
Health and Life Sciences
Headquarters and Business Services
Food and Agribusiness
Innovation and Technology
Financial Services and Insurance
It may be beneficial to discuss how the City can, or cannot, fold in our economic development goals
with those of Greater MSP.
On May 15, 2012 at 4:OOpm there will be a ribbon cutting event at Proto Labs. Given this is one of
the first businesses to locate within the Business Park in some time, and due to their projected
employment base, there were be several special guests in attendance. Representatives from both
Greater MSP and the Department of Employment and Economic Development (DEED) as well as
Council members and Dr. Ron Thomas from DCTC are also scheduled to attend. The Port
Authority is of course invited. There will be formal comments from several in the public sector and
representatives of Proto Lab.
Included in the packet is a monthly update from Richard Palmiter regarding marketing of the Genz
Ryan site. This was requested at the last meeting. Also included was information regarding the
current Metropolitan market.
GREATER MSP'
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FROM OUR CHAIRMAN
Just over a year ago, private and public leadership in our
community came together to create a new future for our
region. After much thoughtful analysis and discussion by the Itasca Project, we set
out to unite the region in a coordinated economic development effort. The partnership we
felt among leaders from many companies and from our cities and counties emboldened
us to start the Minneapolis -Saint Paul Regional Economic Development Partnership
(GREATER MSP).
We live in a great region, filled with smart people, great businesses, engaged leadership, and an outstanding quality of life.
Yet our region's job growth was lagging behind the national average and we weren't realizing our fair share of economic
expansion. In order to ensure our region's future prosperity, we needed to reverse the job loss trajectory and bring new
opportunity to the region. To do this required a shift in our approach to economic development.
GREATER MSP is poised to drive growth and expansion of the region's economy by retaining, expanding, and
attracting business and talent to the 13- county Greater MSP region. Political boundaries don't determine
business success. It is the assets of this community a strong workforce, top education and research facilities, a
well planned infrastructure, and a drive for economic excellence that define what we can offer businesses, and these
transcend boundaries.
GREATER MSP will succeed because it is a best -in -class organization, led by an experienced staff and supported by a
Board of business and public- sector leaders committed to coordinating business investment and creating jobs across
the region. It plays a distinct role that will enhance the economic development efforts of other organizations and
invigorate the Greater MSP business community.
We've hit the ground running and we're not looking back. But there is still
And so GREATER MSP much work to do and many opportunities to capture. We couldn't have come
was formed, a new so far so quickly without the shared vision of all our region's leaders. We will
work to make this an even more successful and vital community; one with
regional partnership to both a great past and a bright future.
move our region from its
Sincerely,
longstanding position
as the best kept secret
in business to being t
recognized as a globally tip
competitive region. Douglas Baker, Jr.
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WE WILL BE RECOGNIZED w er
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GREATER MSP will accelerate job
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4 LEADING regional economic strategy
development, aligning with regional
partners to target key industry sectors for
growth.
BRANDING AND MARKETING
-Alt ■r our region to business decision
makers, site location consultants,
workers, and residents.
SERVING business clients as
the region's `one -stop shop"
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FROM OUR CEO
Regional partnership is the key to accelerating our job growth
and realizing significant new investment in our region. With
tremendous help and insight from public and private partners throughout the 13- county
Metropolitan Statistical Area (MSA), we are now serving the region with a straightforward
vision and mission for our work together.
Our vision is clear: We see the Greater MSP region recognized as a globally leading
economy. The key word in this statement is recognized. With a gross domestic product
of $200 Billion, we are a significant global economic region in fact if we were a
country, we'd be the 44th largest in the world. We lead the world in both traditional strengths such as food production,
agribusiness, and financial services, as well as new technology sectors such as medical devices, health services,
education, and water quality. It's time to make sure that the rest of the world's investors, decision makers, talented
workers, and others realize this, too.
GREATER MSP's organizational mission is to accelerate job growth and capital investment in the region. It is only through this
ongoing economic vitality and growth that we will continue to be a place where business and people prosper on a global scale.
In 2011, our work was focused in four areas:
With a gross domestic First, in partnership with leaders and economic development
practitioners from around the region, we developed an economic
product of $200 Billion development strategy that leverages our region's business strengths
we are a significant global and identifies the strongest opportunities for future growth.
economic region in fact if we Second, we developed a regional brand marketing strategy that
were a country, we'd be the promotes how this region drives business.
44th largest in the world. Third, we developed a protocol and pipeline to connect business
expansion opportunities with regional and local resources and
availabilities.
And finally, we built our organization's operational infrastructure and started on the path to secure our financial future.
We accomplished much, but there is still much to do.
It has been an amazing year and I've loved every minute I've been here. I'm proud to call myself a Minnesotan, and
I'm proud to represent GREATER MSP. We are starting to see the momentum build. We have only just begun to see
how powerful our actions can be by working together and giving visibility to what makes this region great. I thank you
for all your support and look forward to our continued partnership.
Yours in regional excellence,
W
Michael Langley
CEO, GREATER MSP
FORMATION AND GOVERNANCE
GREATER MSP VVe a r e
Board of Directors
CHAIR
accountable.
Douglas Baker, Jr., Ecolab, Inc.
GREATER MSP is a private public partnership
VICE CHAIR
funded by business, and city and county
Ken Powell, General Mills
governments. We are committed to producing a meaningful
SECRETARY return on their investments. In early 2011, we received
Richard Davis, US Bancorp our 501(c)3 status and completed the formation of our
TREASURER organizational infrastructure step one of this commitment.
David MacLennan, Cargill, Inc.
CEO
Michael Langley, GREATER MSP
GREATER MSP
Mary Brainerd, HealthPartners
Marilyn Carlson Nelson, Carlson Board of Directors
Our first Board members, most from the Itasca Project's job growth
Douglas Carnival, Of Counsel, McGrann
Shea, Carnival, Straughn and Lamb task force, agreed unanimously on the need for a robust Board of
Mayor Chris Coleman, City of Saint Paul seasoned leaders from both the public and private sectors and from
across the 13- county Greater MSP region.
Benjamin Fowke, Xcel Energy, Inc.
John Griffith, Target Today, our Board of Directors reflects our region's diversity and
Commissioner Joseph Harris, unique assets. Members represent businesses from a wide
Dakota County range of industries and geographies, and include four county
Randall Hogan, Pentair commissioners, and the mayors of Minneapolis and Saint Paul.
Virginia Hubbard Morris, All are fully committed to the region's business community and
Hubbard Broadcasting its economic success.
Jay Lund, Andersen Corporation
David Mortenson, Mortenson Construction Partnership
Russ Nelson, Nelson, Tietz and Hoye Inc. Advisory Council
Laura Oberst, Wells Fargo Bank Established by the organization's bylaws, this Council advises
Chris O'Connell, Medtronic, Inc. and supports the GREATER MSP Board of Directors. It is
Commissioner Mike Opat, Hennepin County chaired by members of the Board, and includes more than 50
economic development partners, practitioners, investors, and
Christopher Policinski, Land O'Lakes, Inc. organizations involved in economic development functions
Commissioner Victoria Reinhardt, from throughout the Greater MSP region.
Ramsey County
Mayor R.T. Rybak, City of Minneapolis Advisory Council working groups oversee and ensure the
Commissioner Rhonda Sivarajah, success of our operational protocol, marketing, and regional
Anoka County product improvement.
GREATER MSP professional team
In 2011, we hired our CEO, Michael Langley, a nationally recognized economic development leader,
and staffed four organizational teams: Strategy Research, Marketing Communications, Business
Investment, and Operations.
Joel Akason David Griggs Amy Quaintance
Director, Business Investment Vice President, Administrative Assistant
Business Investmr_ nt
Sara Perlman Barrow Kathy Schmidlkofer
Director, Investor Relations Michael Langley Executive Vice President
CEO
Carolyn Bates Gita Sitaramiah
Research Analyst Mary Jo Lewis Director,
Executive Assistant Marketing Communications
Sara Benedict to Michael Langley
Human Resources, Generalist Julia Spencer
Micki Mathieson Investment Associate
Michael Brown Accounting Manager
Vice President, Val Vannett
Marketing Communications Ted Mondale Director, Strategy Research
Vice President, Strategy Research
Gene Goddard
Director, Business Investment
"As an investor in GREATER MSP, Woodbury is now
part of a global marketing and outreach program."
Mary Giuliani Stephens, Mayor, City of Woodbury
LONG -RANGE GOALS
It's time for
aggressive o
TO ACHIEVE OUR MISSION, we've set aggressive five -year goals
and developed the strategies to reach them.
Five -year goals
Priority -one is to change our region's job growth trajectory, outpace the U.S. rate of employment
growth, and meet or exceed job growth rates of competing, high performing peer groups.
A total increase of 100,000 jobs
in GREATER MSP
100,000 New Jobs
By 2016, GREATER MSP
will support the creation
25% Margin
of 100,000 new jobs in of Excellence
GREATER MSP
the Greater MSP region. margin of J
excellence
Our direct activity will
stimulate a "margin of
Projected
excellence" of 25,000 of regional job
these jobs. growth
2012 2016
Second, we seek significant For every $1 invested, we will realize:
returns on our investors' funding. 50 in new payroll
$100 in increased gross regional product
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KEY INDUSTRY SECTORS
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etti.,,,,,_.:-- To create our regional economic development strategy, eleven roundtable meetings
'"4 I were held with economic development partners throughout the region (one in
F 4 each Minnesota county). Together, we assessed opportunities and assets for job
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143 growth and business investment. This input, combined with analysis conducted by
McKinsey Company, identified five key industry sectors that offer our top growth
opportunities. By focusing on these sectors, we expect to see the greatest return
on our efforts. In each, our region boasts significant strength in knowledge base,
workforce quality, industry infrastructure, and research capabilities.
Z HEALTH AND LIFE SCIENCES
Bio -tech industries, healthcare providers and payers,
9
IT providers, and medical device companies.
If HEADQUARTERS AND BUSINESS SERVICES
'"'11►+ Corporate headquarters, creative and professional services, and data centers.
1 i FOOD AND AGRIBUSINESS
1 r R `70 Food processing and production, agrichemicals, and seed production.
E
.r+ INNOVATION AND TECHNOLOGY
R &D centers, software and IT development,
advanced manufacturing, and traditional and
renewable energy development.
6 FINANCIAL SERVICES AND INSURANCE
Financial advisory and insurance companies.
We don't Just make business prosper.
,:.114'. N We make history.
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MARKETING AND OUTREACH
Business and eo le
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prosper here.
In 2011, we launched a new brand
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0% identity, Prosper i n an effort to
galvanize the region on a single path
toward growth. This platform is based on the
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nsight that our region as a whole owns a proud heritage
e t of sustained prosperity that continues to benefit the
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y sw air companies and people who call it home.
We launched our campaign in October of 2011 and
have delivered more than 24 million media impressions.
We doubled the average number of views to our website
(5,759 per month) and our videos were viewed more
than 50,000 times on YouTube.
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Business and People
Prosper her-
PRINT/OUTDOOR ADVERTISING
We highlighted industries and companies that prosper here by
G REATER »MSP w IOW ,CKAr�.t.;r4,.3 111 MI showcasing the talented workforces that drive their success. irl OP. n..t —.1.0 4y1.%IM411 .%4 I 1.1 A(41.1.0 0 I, 'I
LAUNCH EVENT AT PANTAGES THEATER
cz' We introduced our organization and our business and marketing
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4 a strategies to the region to help engage partners to work and invest
with us, and to become ambassadors for the region. We promoted
h the event with more than 1 million media impressions.
GREATER MSP WEBSITE
Our website, www.greatermsp.org, highlights our regional assets and
creates a single destination for prospects to learn about our area. In
21 News. »H.,r Ur" just over two months, we had 14,398 unique visitors, 17,625 total
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SOCIAL MEDIA
We launched the GREATER MSP
Facebook site, Twitter feed and YouTube
channel, which are already raising
awareness across the U.S. and building __.._..a_a
regionalism at home.
CC GREATER MSP"
ai YOUTUBE
Several videos showcasing the Greater MSP
Q A region were completed and are enticing You Tube .11 viewers to learn more about our region. Find
them at YouTube /greatermsp.
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COLLATERAL
We finished our first regional brochure, which is being distributed in
2012. It is also available at www.greatermsp.org.
OUTREACH
—7 '(7 t,,r In 2011, GREATER MSP team members began ambitious outreach efforts, ca
k promoting our region and initiating relationships with business leaders and
i site selection consultants worldwide. Visits included Charlotte, Chicago,
GREATER MSP"
1. Atlanta, and Portland; as well as Tokyo and Harbin, China. Our teams also
met with delegations from Japan, France, Winnipeg, Thailand, and Austria.
2011 PROJECT COMPLETIONS
We're roud to play our part p
GREATER MSP IS COMMITTED TO DRIVING JOB GROWTH through a mix of
attracting new companies to the region, retaining companies who have options to
grow elsewhere, and helping companies located in the region to expand. In every
case, our success is due to the great work of our partners.
We believe that 80% of job growth will come through
retention /expansion efforts and 20% will come through attraction.
Though only operational for a few months in 2011, GREATER MSP was successful in partnering with
regional economic development organizations to realize job growth in the region. We're confident
that these wins represent just the beginning of what's to come.
Attraction Retention
Five 9's LLC will develop and own The Connexion, Polaris made key product acquisitions in
a Multi- Tenant, carrier neutral data center in 2011 with the purchase of North Carolina
Eagan. The result of a concerted effort led by the based Indian Motorcycles and North Dakota
City of Eagan to attract data centers, this new data based GEM. When it needed to consolidate its
center will add Tier 3 Data Center space to this administrative and showroom space, GREATER
underserved market to accommodate corporate MSP was able to assist Polaris in its initial
data centers, colocation and cloud companies, and site search, resulting in a new lease of 30,000
disaster recovery end users. Additionally, the new square feet of secure space in Plymouth.
data center will bring high capacity connectivity
and enhance the region's broadband infrastructure.
GREATER MSP, working with DEED, was able to
help the company leverage key provisions of the
recently passed Data Center Incentive legislation
and help it make contacts in the region.
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SUCCESS DATA
FIVE 9'S LLC
IVE 9'S LL Jobs Created: 25 to 50
Square Footage: 138,000
Capital Investment: $50 million
POLARIS to $75 million
POLARIS INDUSTRIES INC.*
Jobs Created: 80
Square Footage: 30,000
Capital Investment: $500,000
li UNISON COMFORT TECHNOLOGIES*
Jobs Created: 83
wow_ 0 'V: rym Square Footage: 30,000
Capital Investment: $12,500,000
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i 4 CHART, INC.
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Jobs Created: 100
e Square Footage: 141,000
Capital Investment: $4 million
v. POLAR SEMICONDUCTOR, INC.*
T Jobs Created: 300
w Square Footage: 98,000
Capital Investment: $90,000,000
y PRIME THERAPEUTICS*
Jobs Created: 300
n Square Footage: 100,000
W Capital Investment: N/A
*Data based on estimates provided.
2011 PROJECT COMPLETIONS
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CHART, INC.
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Chart, Inc., located in New Prague, needed to expand
its operations to meet growing demand. With operations
Expansions in many locations throughout the US, the company
had many options. A critical factor in its decision
Prime Therapeutics realized an opportunity to grow
was the ability to find available workforce. When a
and saw great promise in the region's workforce.
location couldn't be found in New Prague, GREATER
With three locations in the area, the company
MSP helped find a location in Owatonna that met the
needed more space, and found it in a nearby
company's operational needs, and we informed the
vacant building. GREATER MSP partnered with
company about workforce availability. Working with
DEED to create a financial assistance package to DEED, GREATER MSP was able to help the company
help cover the costs of facility renovations.
access Minnesota Investment Funds and JOBZ funds to
aid in the expansion.
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UNISON COMFOR?
TECHNOL•
Unison Comfort Technologies, a manufacturer
of innovative commercial and industrial HVAC
Polar Semiconductor, Inc. wanted to double systems, wanted to acquire its headquarters
production of its high performance automotive and building. GREATER MSP worked with the City
electronic IC products at its Bloomington facility. of Minneapolis and the state to make public
GREATER MSP worked with the company and the city infrastructure improvements made the location
to allow Polar to acquire sewer access credits. This more efficient for the company.
saved the company considerable expense and time,
and allowed for timely acquisition of building permits.
"The programs that GREATER MSP offered helped my client bridge
a significant financial hurdle in order to expand in Eagan. Its quick
response was extremely helpful and greatly appreciated in bringing this
transaction together." Raymond J. Reese, Senior Vice President, CBRE, Inc.
INVESTMENT DEVELOPMENT CAMPAIGN
There's no telling
what we'll do together.
1 q r .;s In 2011, GREATER MSP partnered with Resource
kW J Development Group to help lead our investment
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rwil Z.._ d evelopment process. More than two dozen business and
,A public leaders stepped forward to support the organization's formation
r--.: and start -up. Our aim was to raise $2.8 million for 2011 operations. We
exceeded our goal by raising nearly $3.0 million. We are grateful to these
companies, cities and counties for joining us to advance the region.
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-i4 ANNUAL BUDGET
ALLOCATION GOAL
DRIVE REGIONAL COLLABORATION 10%
MARKETING AND BRANDING 50%
NEW BUSINESS DEVELOPMENT 20%
EXISTING INDUSTRY SUPPORT 20%
i RP
i In October 2011, we launched a three -year, $15 million
I investment campaign that will fully fund GREATER MSP in
its efforts to stimulate regional economic development.
"Successful fundraising depends on leadership's
ability to create a shared vision for the campaign.
Rob Radcliff, Resource Development Group
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2011 FINANCIAL RECAP (year ending December 31, 2011)
INCOME 2011 ACTUALS 2011 BUDGET BUDGET
STATEMENT (000) (000) (000)
Revenues $2,977 $2,800 $177
Expenses $2,436 $2,570 $134
Reserve $541 $230 $311
These numbers represent an annual run rate of $4.0 million. In accordance with
sound financial management practices, we are building an operating reserve. Through
conservative expense management, we added $400K of marketing expenditure not
originally budgeted (included in actual expenses, above).
BALANCE SHEET (000)
"With the collective efforts of
ASSETS GREATER MSP and its supporters,
Current Assets $1,349 businesses and people around the
Fixed Assets $112 country and the world will want
to learn more about what makes
LIABILITIES AND NET ASSETS this such a great place to live
Current Liabilities $230 and do business."
Temporarily Restricted Net Assets $690 Laura Oberst, Executive Vice President,
Wells Fargo Bank
Net Assets $541
2011 GREATER MSP INVESTORS
2011 INVESTORS
Andersen Corporation Land 0' Lakes, Inc. Anoka County City of New Prague
Capital City Partnership Medtronic, Inc. City of Apple Valley City of Prior Lake
Cargill, Inc. Mortenson Construction City of Belle Plaine City of Rosemount
Carlson The Mosaic Company City of Bloomington City of Saint Paul
C.H. Robinson Nelson Tietz and Hoye, Inc. City of Burnsville City of Savage
Worldwide, Inc.
Pentair, Inc. City of Chaska City of Shakopee
Ecolab
Target Corporation City of Eagan City of Woodbury
General Mills
US Bancorp City of Edina Dakota County
Great River Energy Wells Fargo Bank City of Elko New Market Hennepin County
HealthPartners
Xcel Energy, Inc. City of Jordan Ramsey County
Hubbard Broadcasting, Inc. City of Lake Elmo Scott County
City of Minneapolis Washington County
"GREATER MSP allows all of us to sit at the table
together and to think regionally and globally to ensure
our continued growth and success."
Mike Opat, Chair, Hennepin County Board of Commissioners
IN -KIND INVESTORS
Capital City Partnership Minneapolis Foundation
General Mills Minneapolis Regional Chamber of Commerce
General Office Products Minnesota State Chamber of Commerce
Economic Development Services, Inc. Minnesota Wild
H. Larson Photography Nelson Tietz Hoye, Inc.
Haberman Associates Padilla Speer Beardsley, Inc.
Haskell's Phillips Distilling Company
Hubbard Broadcasting, Inc. Sage Hunter
Itasca Project St. Croix Promotions
KPMG LLP Sullivan Cotter and Associates, Inc.
McKinsey Company Tunheim
McGrann Shea Carnival Straughn and Lamb Wells Fargo Bank
Metropolitan Airports Commission Unisys
PARTNER ADVISORY COUNCIL MEMBERS
John Griffith, Co -Chair Janna King, Economic Development Services, Inc.
Target Corporation Todd Klingel, Minneapolis Regional Chamber of Commerce
Russ Nelson, Co Chair Matt Kramer, Saint Paul Area Chamber of Commerce
Nelson, Tietz and Hoye Inc.
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Curt Larson, City of Blaine
Margaret Anderson Kelliher,
Minnesota High Tech Association Kim Lindquist, City of Rosemount
Megan Barnett Livgard, City of Monticello Mark Lofthus, Minnesota Department of
Collin Barr, Ryan Companies Employment and Economic Development
Cecile Bedor, City of Saint Paul Scott Marquardt, Southwest Initiative Foundation
Denise Beigbeder, Ramsey County Tim Mulcahy, University of Minnesota
Bill Blazer,
David Olson, Minnesota Chamber of Commerce
Minnesota Chamber of Commerce /Grow MN! Ewald Petersen, Commissioner, Sherburne County
Paul Cerkvenik, MN Private Colleges Mark Phillips, Commissioner, Minnesota Department of
Katie Clark, Minnesota Trade Office Employment and Economic Development
Patrick Connoy, Hennepin County Cathy Polasky, City of Minneapolis
Mary Rothchild,
Caren Dewar, Urban Land Institute Minnesota Minnesota State Colleges and Universities
Marlys Dunne, Xccent, Inc. John Schlagel, Schlagel Manufacturing
Wayne Elam, Commercial Realty Solutions Janelle Schmitz, City of Woodbury
Chris Eng, Chisago County Gary Shelton, Scott County
Steve Fisher, Medtronic, Inc. John Sullivan, Carver County
Pat Born, Metropolitan Council Anders Tolisten, Tollridge, Inc.
Don Haller, Connexus Energy Dale Wahlstrom,
Jeff Hamiel, Metropolitan Airports Commission Lifescience Alley /Bio Business Alliance of Minnesota
Jon Hohenstein, City of Eagan Charlie Weaver, Minnesota Business Partnership
Jim Hovland, Mayor, City of Edina Gene Winstead, Mayor, City of Bloomington
Scott Johnson, Xcel Energy David Wright, US Bancorp
Bob Kill, Enterprise Minnesota
Heartfelt thanks.
GREATER MSP
Minneapolis Saint Paul Regional Economic Development Partnership
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Website: www.greatermsp.org
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You Tube
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Zoom Prospector /GIS site: www.greatermspprospector.com
www.facebook.com/ reaterms The handle is @GreaterMSP 651 North Robert g p youtube.com /greatermsp
400 North Robert St., Suite 1520, Saint Paul, MN 55101
LISTING REPORT
4/30/12
Listing: Rosemount Commercial
Client: City of Rosemount
Client Contact: Kim Linguist
Acreage: 2.45 ac 6 parcels
Location: Hwy 3
Description: Vacant/Redevelopment Land
Broker Contact: Brian Pankratz, Richard Palmiter
Listing Price: Best Offer
Listing Expiration: 10/09/2012
1 List data on Loopnet, Costar, MNCAR, CBRE's Internal HUB Completed
2 Install Onsite Signage Completed
3 Brochure Completed
4
5 E- Marketing (Campaign Logic Program) Local LSG and CBRE databases 2/16/12
6 Analyze Campaign Logic Report Completed
7 Update Brochure As Needed
8
9
10 On•oin• In•uir /Lead Follow U• On•oin•
Contact User /Company Date Comments
1 Sandy Barn CBRE 11/2/11 Sent brochure
2 Tom Simon CBRE 11/8/11 Sent brochure
3 John Ryden CBRE 11/8/11 Sent brochure
4 Steve Nielson Welsh 11/17/11 Discussed site sent brochure
5 Luke Appert Northmarq 11/18/11 Discussed site sent brochure
6 Jim DePetrio CBRE 11/20/11 Discussed site sent brochure
7 Nick Ziegelmann CBRE 11/20/11 Discussed site sent brochure
8 Kari Gill 12/1/11 Discussed site sent brochure
9 Jan Just Kidding Around 12/2/11 Discussed possible daycare location sent brochure
10 Don Twombly 12/22/11 Discussed possible carwash location sent brochure
11 Kari Gill Dakota County 1/4/12 Discussed the site further sent brochure
12 J. Decesare 1/10/12 Sent brochure
13 Mike Korsh KAR Realty 1/24/12 Sent brochure
14 Ross Hedlund Frauenshuh 2/9/12 Sent brochure
15 Matt Alexander KAR Realty 2/16/12 Sent brochure
16 Jeff DeCesare 3/9/12 Seeking 1031 exchange properties sent brochure
17 Eric Curtis 3/12/12 Sent brochure
18 Mike Byron 4/13/12 Discussed possible site options- sent brochure
19 Lee Henning 4/17/12 Sent Brochure
20 Patrick Stoffregen 4/17/12 Inquired about sites discussed the properties sent brochuie
21
22
23
24
25
32
33
34
35
36
37
38
Comments Date
1 Met with Port Authority revising brochure /recommending pricing 1/17/12
2
3
4
I CBRE
Minneapolis /St. Paul Industrial
www.cbre.com /research First Quarter 2012
The first quarter of 2012 brought fluctuations Industrial sale activity in the 1st quarter of
in terms of economic activity. Employers 2012 was limited to a handful of user driven
pulled back sharply on hiring last month, a sales and some smaller investment deals.
reminder that the U.S. economy may not be Institutional investor demand continues to
growing fast enough to sustain robust job grow for larger core investment opportunities;
growth. The unemployment rate dipped, but with some of the 1st quarter sales pushed to
primarily because more Americans stopped the 2nd quarter, and an increase of product in
looking for work. The Labor Department says the market, the 2nd quarter should see a
Quick Pats the economy added 120,000 jobs in March, modest pickup in industrial sale activity.
down from more than 200,000 in each of the
Change from last previous three months. Despite the lag in The Northwest submarket was the best
Current Yc Qti recent job growth, the aggregate total of performer during the first quarter, posting
a 858,000 jobs added since December is the 209,548 SF of positive net absorption due to a
Direct Vacancy 7.1 /o best four months of hiring in two years. Also,
few larger leases signed in Brooklyn Park and
Net Absorption 356,802 t the government reported consumers increased
Rogers.
their spending in February by the most in g
Warehouse Rate $4.54 4 seven months, which is raising expectations The Minneapolis /St. Paul Metro 1st quarter
Blended Rate $6.84 1 4 the economy will grow a bit faster in the indices for all industrial buildings showed a
second quarter. positive net absorption of 356,802 SF. The
Construction 671,909 4 4 multi- tenant net absorption showed a positive
While construction finally picked up at the end 227,752 SF. Lease rates have dipped slightly,
The arrows are trend indicators over the of 2011, we start the new year with only one
specified time period and do not represent a while leasing activity has remained fairly
positive or negative value. (e.g., absorption completed project; an 80,000 square -foot
could be negative, but still represent a constant. Although we did not see the big
positive trend over a specified period.) expansion to the current Black Box facility in
Maple Grove. In addition, there are 4 new boost in positive activity we had hoped for in
buildings totaling 337,509 SF that have the 1St quarter, an adequate supply of
broken ground in the first quarter. Adding construction and steady increases in positive
Hot Topics these new developments to the projects that net absorption paired with a positive
broke ground in 2011, we have a total of projection in job growth; we hope to make
Started 2012 with over 350,000 671,909 SF of new construction to be further progress in economic recovery
completed in 2012. throughout 2012.
SF of positive absorption
80,000 square -foot addition for Direct Vacancy Rate vs. Warehouse Rate Warehouse Rate (t1t� $4.54
Direct Vacancy Rate MI 7.
Black Box completed in Maple
Grove
Over half a million SF of new 8% $s
construction to be completed in y°
the first half of 2012 6%
The lack of large blocks of 5%
IIN 54
lit
functional space have driven the r 4'/°
development of future sites; will a 35'°
S 3 1
lead to construction in the coming 2v°
quarters 1S
Availability rates have decreased ay° 52
slightly, reflecting increased 1006 1007 1'49 1009 1010 1011 1012
leasing activity
CBRE
2011, CBRE
Submarket Statistics
Rentable Direct Vacancy Total Vacancy Under Avg. Asking Direct Avail. Total Avail. 3
Market Net Absorption SF Whse Rate B
Area Rate Rate Construction SF SF/YR Rate Rate c
0
Northwest 60,788,499 7.4% 7.7% 209,548 0 54.81 9.9% 10.5% o
t
Southwest 68,699,755 7.9% 8.2% 118,640 180,000 54.91 12.2% 13.1%
gn
South Central 49,963,496 8.5% 8.7% 56,281 63,000 54.62 12.2% 12.6% e
c
St. Paul 20,227,822 8.7% 8.7% 33,944 126,000 54.00 9.8% 9.8% B
o.
Minneapolis 30,453,399 5.1% 5.1% (44,794) 0 53.96 8.8% 8.9% 0
0
North Central 48,658,896 6.1% 6.5% (81,142) 274,509 54.63 8.4% 9.5%
East 13,968,590 4.8% 5.1% 39,870 28,400 S5.32 5.5% 6.3%
Midway 33,465,994 6.4% 6.5% 24,455 0 S4.09 10.2% 10.9%
Building Type
Bulk Whse 65,080,024 8.5% 8.8% 271,832 120,000 54.07 12.8% 13.3%
Office Whse 137,471,965 6.7 7.0% 209,300 551,909 S4.35 10.0% 10.8%
Office Showroom 35,130,271 10.6% 10.8% (131,339) 0 *56.84 13.7% 14.1%
Other industrial 88,544,191 5.9% 5.9% 7,009 0 54.01 8.4% 8.5%
Total 326,226,451 7.1% 7.4% 356,802 671,909 $4.54 10.2% 10.9%
US III 8.3%
Minnesota III 5.6%
Unemployment Rate MSP ME 53%
The national rate decreased again this quarter
from 9.1% last quarter to 8.3%. Both the
10.0% Minnesota and Minneapolis rates followed this
9 trend as well, as they decreased from 5.9% to
5.6% and from 5.4% to 5.3% respectively. As we
80 0
move into the spring and summer seasons, a
7.0% decrease in metro unemployment is expected, as
the rates are not adjusted for seasonal
6.0° %0 employment.
5.0% f
4.0%
3.0%
2.0%
0107 0108 0109 0110 0111 0112
T
zA
S)
0
0
3.
CBRE Page N
0
2011, CBRE tJ
Net Absorption Net Absorption 2012 YTD NM 356,802
1 st quarter showed a positive net absorption of 356,802 square feet.
8,000 Although the economy has leveled off, this was still our market's 7'h 3
7,000 consecutive quarter of positive absorption Major positive absorption z
6,000 this quarter was predominately concentrated in the Northwest and -°a
Southwest submarket due to a large lease signed by Blanks USA in c
5,000 Brooklyn Park as well as a lease done by Hysitron in Eden Prairie. The v
4,000 North Central and Minneapolis submarkets showed negative
3,000 absorption, while the Midway and St. Paul markets were relatively la
2,000 inactive.
3
a
1,000 There is an increasing number of active users in the market, but there C
0 may be a lack of adequate space to accommodate them all. This trend o
-1,000 2865 200L- 2008 -I 281.9-- 2A}}- -2A}2- will continue to increase construction numbers in the coming quarters.
-2,000
en Mg 80,000
Construction Completions Spec 0
There was one project totaling 80,000 SF completed in the 1St quarter.
2,500 This build -to -suit project was an addition to the current Black Box
facility in Maple Grove. 4 new projects totaling 337,509 SF broke
2,000 ground in the first quarter; In addition to the construction projects that
were underway from the end of 2011, there is a total of 671,909 SF of
1,500 construction projects scheduled to finish in 2012. The drastic recent
increase in construction will hopefully spark more positive activity in
1000 the new year.
500
0 1
2005 2006 2007 2008 2009 2010 2011 2012
Direct Vacancy 71%
Direct Vacancy vs. Availability Direct Availability 11111 10.2%
Direct availability fell to 10.2% from last quarter's mark of 10.7
This is also a decrease compared to the rate of 11.2% posted one year
D
1.0;D ago. Similarly, vacancy decreased slightly to 7.1% this quarter, which
10.0 °0 is a few point drop from the 7.5% posted one year ago. A decrease in
both marks reflects the fact that more space continues to be absorbed.
9.0 °0
8.0 °0
5.0 °-o
4.0°, %0
T
i�
2005 2006 2007 2008 2009 2010 2011 2012
0
c
a
CBRE Page 3 N
2011, CBRE N
MarketView Minneapolis /St. Paul Industrial Asking Lease Rate
Average of Asking Lease Rates for each property
Includes Direct the associated Space acei Soave.
Top Minneapolis /St. Paul Transactions
Includes Direct Available Space unless otherwise
indicated
Size (Sq. Ft.) Tenant /Buyer Location Completions
Rentable Building Area completed during the
1 14,000 (Lease) Delkor 4300 Round Lake Rd, Arden Hills period
Market Coverage
102,000 (Lease) Group 0 2360 Pilot Knob Rd, Mendota Heights Existing completed cornpetilive properties
Net Absorption
92,000 (Lease) Blanks USA 9200 Xylon Ave N, Brooklyn Park The change in Occupied Sq. Ft. during the period
for all Existing properties
Base Inventory, Base or Building
82,000 (Lease) MinnPar 5251 Program Ave, Mounds View Square Feet
The sum of the Rentable Building Area for all
80,000 (Renewal) RFG Distributing 7400 49'h Ave N, New Hope competitive properties
Occupied Square Feet
70,000 (Lease) TREND 451 Industrial Blvd, Minneapolis Rentable Building Area less Vacant Space
Under Construction
Buildings that have begun construction as
0. 60,000 (Lease) DIVERSIFIED 2871 Service Rd W, Eagan evidenced by site excavation or foundation work,
and is on -going
Available Space
Submarket Map Space being marketed to potential occupants, in
Rentable Sq. Ft. (direct and sublease combined,
unless otherwise indicated)
fir
A Availability Rate
n Available space as a percentage of the Base
Inventory or Building Sq. Ft
r
Vacant Space
Available Space that is physically vacant, in
p Rentable Sq.
l� Vacancy Rate
itaczrmo ss°
a Vacant space as a percentage of the Base
Inventory or Building Sq. Ft
4 W w
;2:c:1
jilt MI
Ire c"..
-IA SS
1r IM
t7
In
su
I»
tee'
1i For more information regarding the
Copyright 201 1 CBRE Statistics contained herein may represent o different data set than that used to generate National MarketView, please contact:
Vaconcy and Availability Index statistics published by CBRE Corporate Communications or CBRE's research and Tom Hayhoe, Researcher
econometric forecasting unit, CBRE Econometric Advisors. Information herein has been obtained from sources believed CBRE
C B R E reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation
about it. 0 is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, 4400 W 78'^ St, Minneapolis
assumptions or estimates used are for example only and do not represent the current or future performance of the market T. 952.924.4604 F. 952.831.8023
This information is designed exclusively for use by CBRE clients, and cannot be reproduced without prior written permission
of CBRE. Tom.Hayhoe @cbre.com
CBRE
Minneapolis /St. Paul Retail
www.cbre.com /research First Quarter 2012
First quarter of 2012 was relatively uneventful. The first quarter of 2012 saw less movement
The Dow Jones Industrial average moved than previous quarters in the restaurant
above 13,000 for the first time since 2008, and industry, but there were a few notable changes.
jobs reports have predominantly been positive. Minnesota -based investment group TSSN Inc.
The real estate market in the Midwest seems to purchased The Melting Pot restaurant, a
Quick Staffs be on the rise, and most believe the worst is downtown Minneapolis hotspot, out of
behind us. bankruptcy, and Cowboy Jack's Bar and
Change Restaurant announced it would be opening a
0 T here were few major retail transactions that
Current YL Qtt took place in the first quarter of 2012, but one new location in downtown Minneapolis near
a
Vacancy 8.1% 4 notable transaction was the purchase of the the Target Field. This is Cowboy Jack's fourth
location in the metro area.
Lease Rates $16.91 t t 116,000 square foot Woodbury Commons
Net Absorption 57,968 SF it 4 retail center. The property was part of a two- Wal -Mart again led the way for new
Construction 1.59M t property sale between Inland Real Estate construction this quarter with almost 500,000
Corporation and Robert Muir Company. The square feet between its new Brookdale,
'The arrows are trend indicators over the
specified time period and do not represent a two sites were purchased by Inland for a sum of Burnsville and Lakeville sites. These three sites
positive or negative value. (e.g., absorption
could be negative, but still represent a 10.3 million. are the first of four that Wal -Mart will deliver in
positive trend over a specified period.)
Best Buy made headlines in the first quarter
2012.
with the announcement that it would be closing First quarter absorption was positive again at
its doors on 50 stores across the country. Six of 57,968 square feet, extending the positive
Hot Topics
the stores to be closed are in Minnesota. They absorption trend to its seventh straight quarter,
also announced that they would be downsizing another clear sign that the commercial real
Best Buy to close 50 stores across the
U.S. their Edina store, which was their top store in estate market is recovering. The vacancy and
the country in 2009. availability rates were down slightly for the
Cowboy Jack's to open new location
in Uptown quarter at 8.1% and 9.2% respectively.
Wal -Mart breaks ground on new Net Lease Rate in $16.91
Lakeville store Vacancy Rate vs. Net Lease Rate Vacancy Rate .111 e.1%
10% $22
Old Country Buffet announces closing
of 81 locations 9%
8%
Target brings Jeff Jones aboard as $20
new Chief Marketing Officer 7%
Governor fights to get Vikings stadium 6%
bill through legislation a 5% $18
4o /a
3%
$16
2%
1%
0% $14
CBRE 1005 3005 1006 3006 1007 3007 1008 3008 1009 3009 1010 3010 1011 3011 1012
2011, CBRE
Submarket Statistics
Avg. Asking
Absorption 3
Market Rentable Area Vacancy Rate Under Construction SF Lease Rate Availability Rate 3
SF SF/YR o
A.V. Lakeville 3,499,383 4.1% 6,899 160,000 S20.04 10.3% o
Brookdale 3,780,561 23% (8,668) 442,000 $12.65 24.5% N
Burnsville 3,486,605 9.2% 23,826 180,000 $18.71 9.9%
Calhoun 1,258,636 8.3% 0 30,000 $26.12 8.3% c
Coon Rapids 4,321,506 5.4% 6,300 6,000 $16.35 6% 5
Eagan /IGH /H 1,796,232 5% 4,790 135,000 $14.13 8.6%
Eden Prairie 3,713,103 3.6% 0 227,000 S15.77 3.8%
Maple Grove 5,331,416 4.7% 16,228 120,000 $14.47 5.3%
Maplewood 3,563,352 7% 2,128 0 $18.27 7.7%
Mpls CBD 2,297,199 13.3% 0 0 $22.09 14.2%
Northtown 3,114,465 11.2% (3,110) 0 $11.35 12%
Ridgedale 5,652,096 5.4% (8,054) 200,000 $14.09 5.6%
Rosedale 5,206,953 6.9% 1,447 21,000 S18.38 7.6%
Southdale 9,553,570 6.6% 5,385 32,000 S25.79 6.8%
St. Paul 1,413,147 9.5% 10,260 2,000 S13.35 9.6%
West St. Paul 1,296,692 10.5% (3,200) 0 $12.05 10.8%
Woodbury 4,684,062 11.9% 3,701 0 S8.86 12.8%
Total 63,968,978 8.1% 57,968 1,589,000 $16.91 9.2%
U.S. IN 8.3%
Minnesota IN 5.6%
Unemployment Rate imp N. 53%
10.0% The national rate decreased again this
9.0% quarter from 8.6% last quarter to 8.3 Both
the Minnesota and Minneapolis rates
8.0% followed this trend as well, as they decreased
7.0% from 5.9% to 5.6% and from 5.4% to 5.3%
respectively. As we move into the spring and
6.0% summer seasons, a decrease in metro
5.0% unemployment is expected, as the rates are
not adjusted for seasonal employment.
4.0%
3.0%
2.0%
T
1007 1008 1009 1010 1011 1012
9
c
9
CBRE Page 2 EI
N
O
0 2011, CBRE N
Absorption Absorpfion 57,968SFYTD
1,800 The first quarter 2012 ended with a positive 3
57,968 square feet of space being absorbed
1,400 in the Minneapolis /St. Paul market, keeping v°
absorption in the black for the seventh
1,000 straight quarter. Starting the year out with v
O r
positive absorption is a good sign and is
600 ii hopefully leading us into a third straight year c
200 of positive absorption. The overall 2011 xi
m
ill year-end absorption was a positive 290,418 o
-200
1 square feet.
-600
2006 2007 2008 2009 2010 2011 2012 YTD
Construction Completions Completions MI 72,800SFYTD
2500
There were 72,000 square feet of space
delivered in the first quarter of 2012, with
2000 more expected in the second quarter of
2012. There is currently almost 1.6 million
1500 square feet of retail space under construction
in the Minneapolis /St. Paul market.
e
1000
500
0 i .1. II NOM
2006 2007 2008 2009 2010 2011 2012 YTD
Vacancy WM 8.1%
Vacancy vs Availability Availability 9Y,
11.0%
Availability and vacancy both decreased in
10.0%
the first quarter of 2012. Availability was
9.0% 1________ down from 9.3% to 9.2% and vacancy was
down from 8.2% to 8.1 Although these
8.0% numbers are only slightly lower than last
quarter, they are notably better than they
7.0 were a year ago. This is continued evidence
6.0% that the market is improving.
5.0%
4.0%
T
2006 2007 2008 2009 2010 2011 2012 YTD
0
c
0
CBRE Page 3 N
2011, CBRE N
MarketView Minneapolis /St. Paul Retail
Average Asking Lease Rate
Rate determined by multiplying the asking net
Top Minneapolis /St. Paul Transactions lease rate for each building by its available
space, summing the products, then dividing by
the sum of the available space with net leases
Size (Sq. Ft.) Type Tenant /Buyer Location for all buildings in the summary.
116,000 Sale Inland Real Estate Group Woodbury Commons, Woodbury Net Leases
Includes all lease types whereby the tenant pays
an agreed rent plus most, or all, of the operating
114,000 Sale Madison Equity Hillcrest Shopping Center, St. Paul expenses and taxes for the property, including
utilities, insurance and/or maintenance
38,000 Lease Whole Foods Downtown, Minneapolis expenses.
Market Coverage
1 5,000 Lease Arhaus Galleria, Edina Includes all competitive retail buildings 30,000
square feet and greater in size.
14,000 Lease Schmitt Music Southdale, Edina Net Absorption
The change in occupied square feet from one
period to the next.
12,000 Lease Ulta Shops at Lyndale, Richfield
Net Rentable Area
The gross building square footage minus the
7,000 Lease Pizza Ranch Shakopee Crossroads, Shakopee elevator core, flues, pipe shafts, vertical ducts,
balconies, and stairwell areas.
Occupied Square Feet
Submarket Map Building area not considered vacant.
Under Construction
Coon Rapids 0 35 Buildings which have begun construction as
i ii 94 miles evidenced by site excavation or foundation work.
Maple Direct Available Square Feet
Grove Available Building Area which is either physically
J vacant or occupied. Does not include sublease
IL Northtown 35 35E space. p
Maplewood
69a Total Availability Square Feet
Available Building Area which is either physically
Brookdale Rosedale vacant or occupied. Includes sublease space.
jj(
94 J 69
Direct Vacant Square Feet
Ridgedale Existing Building Area which is physically vacant
Minneapolis
39 ter or immediately available. Does not include
sublease or shadow space.
494 Calhoun
St. Pall Total Vacant Square Feet
t\ Existing Building Area which is physically vacant
vie So West St. Paul
sli Woodbury or immediately available. Includes sublease and
�"r l t w,r�
t st. ra, h,rl shadow space.
1
Normalization
Eden Eden Prairie 35W Due to a.reclassification of the market, the base,
35E number and square footage of buildings of
Eagan V previous quarters have been adjusted to match
Mississippi River the current base. Availability and Vacancy
figures for those buildings have been adjusted in
previous quarters.
Bumsville APPIe Valley-
j
o
Lakeville
For more information regarding the
MarketView, please contact:
Copyright 2012 CBRE Statistics contained herein may represent a different data set than that used to generate National Andrew Petkoff, Research
Vacancy and Availability Index statistics published by CBRE Corporate Communications or CBRE's research and CBRE
econometric forecasting unit, CBRE Econometric Advisors. Information herein has been obtained from sources believed
reliable. While we do not doubt its accuracy, we hove not verified 5 and make no guarantee, warranty or representation 4400 West 78th St, Minneapolis
CBRE about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, T. 952.924.4885 F. 952.831.8023
assumptions or estimates used are for example only and do not represent the current or future performonce of the market.
This information is designed exclusively for use by CBRE clients, and cannot be reproduced without prior written permission andrew.petkoff @cbre.com
of CBRE.
CBRE
r
t
Minneapolis /St. Paul Office
www.cbre.com /research First Quarter 2012
Entering the new year the U.S. continued square feet on the southeast side of Shady
to show economic signs of improvement. Oak Rd and Highway 62 in Eden Prairie.
The S &P 500 Index generated 12.6% Lastly St. Jude Medical will begin
return for the quarter, consumer construction on its 275,000 square -foot
confidence reached a four year high, and expansion in Plymouth early this year.
employment growth was strong January
and February posting 284,000 and Office leasing activity was moderate first
227,000 net job gains. The end of the quarter 2012. Large and small tenants were
Quick Stats quarter tapered off as March only added most active with a shortage of mid -size
Change from last 120,000 jobs nationally; nevertheless job users shopping the market. Among the
Current Yr. Qtr. gains throughout the quarter were enough smaller tenants, class B and C properties
to drive down the unemployment rate to a experienced the most traction. Longer term
Direct Vacancy 18.7% 4 I three year low of 8.2 leases are being explored by an increasing
Total vacancy 19.4% j j number of tenants looking to lock in on
Locally, the Twin Cities followed suit as discounted rates while landlords are still
Lease Rates $11.77 4 office market indicators improved over the aggressively filling space. In some
quarter. From December to February circumstances where space is limited,
Net Absorption la 24,000 SF t t Minnesota has added 32,300 jobs, landlords are scaling back on concessions.
Construction 0 SF a bringing the total Minnesota jobs Looking forward we can expect the market
recovered to 81,400; over half of the to remain in the tenants advantage until the
156,300 jobs lost from the recession. employment growth kicks into overdrive.
Education and the health service lead all
The orrows are trend indicators over the
specified time period and do not represent a sectors adding 7,000 jobs during January Class A space is tightening due to the flight
positive or negative value. (e.g., absorption
could be negative, but still represent a and February this year. to quality by tenants relocating from class B
positive trend over a specified period.) properties in the downturn. Combined with
The Metro office market continues its slow lack of new supply, larger class A blocks of
Hot Topics progression in the recovery phase. space are all but expended. Metro -wide
Construction continues to be at a standstill there are only four existing class A blocks of
with no speculative projects underway space which can accommodate a 150,000
Target Corp is planning on moving metro -wide. On a positive note, Target square -foot user. Minimal options in the
3,900 workers from downtown Corp. has confirmed its plans to build two market have pushed larger tenants towards
Minneapolis to its Brooklyn Park 325,000 square -foot office buildings on new build -to -suit construction. This trend
its Brooklyn Park campus. The first should continue until vacancy in multi
Campus where they plan to build building will begin construction this tenant buildings recovers to healthy levels.
650,000 SF of additional office space summer. United Health Group is currently Once multi- tenant buildings recover, new
by2015 underway on a 350,000 square -foot office speculative development can start bringing
Dorsey Whitney Law Firm is looking tower on their Minnetonka campus and is more supply to the market. Until then,
planning on constructing an additional limited supply and rising demand should
for 300,000 SF of space in the four buildings consisting of 1.5 million buoy real estate fundamentals in 2012.
Minneapolis CBD
Lease Rate ES $11.
The Twin Cities Metro has seen an Vacancy Rate vs. Lease Rate Vacancy Rate IN 18.7%
increase in office investment properties
for sale 20% $16
18%
Global economic growth remains weak 16% $14
Increase in build -to -suit construction 14
while no speculative construction is on 12% s12
the horizon 10%
8% $10
6%
4% $8
C B R E 1007 3007 1008 3008 1009 3009 1010 3010 1011 3011 1012
2011, CBRE
Submarket Statistics
Rentable Speculative or Multi- tenant Avg. Asking Lease Rate
Market Area Direct Vacancy Rate Total Vacancy Rate Absorption SF Under Construction SF SF/YR Availability Rate
Metro Overall 67,106,026 18.7% 19.4% 24,044 0 $11.77 19.7%
Class A 33,777,414 14.7% 15.8% 123,868 0 513.60 16.3%
Class B 24,062,376 23.0% 23.4% (91,536) 0 $10.74 23.4% .Z►
Class C 9,266,236 22.4% 22.6% (8,288) 0 $9.18 22.6% S
Suburban 36,157,272 18.9% 19.3% (42,227) 0 $12.17 19.7% m
ClassA 15,808,657 17.6% 18.0% 63,224 0 $14.11 18.7% G
Class B 14,620,943 19.0% 19.3% (99,774) 0 511.38 19.4% N
Class C 5,727,672 22.3% 22.8% (5,677) 0 58.65 22.8% y
494 Corridor 16,990,564 17.2% 17.5% 27,425 0 $13.06 17.6% T
a
ClassA 8,088,128 16.1% 16.5% 64,635 0 $15.61 16.7% C
0
Class B 6,731,583 16.1% 16.2% (40,160) 0 $11.87 16.2%
ClassC 2,170,853 24.7% 25.1% 2,950 0 58.62 25.1% r"a
394 Corridor 8,703,587 17.8% 18.5% (66,260) 0 512.60 193%
Class 4,044,168 16.0% 16.9% 5,021 0 514.69 18.6%
Class B 3,504,824 20.3% 20.9% (60,686) 0 $12.31 21.5%
ClassC 1,154,595 16.6% 16.6% (10,595) 0 59.33 16.6%
Northwest 1,310,796 313% 31.5% (2,718) 0 $9.26 31.5%
ClassA 127,000 41.1% 41.1% (640) 0 511.10 41.1%
Class B 846,937 29.6% 29.6% (2,078) 0 $9.20 29.6%
Class C 336,859 32.7% 32.7% 0 0 58.69 32.7%
Sub St. Paul 3,047,501 30.3% 30.3% (20,989) 0 $10.95 30.1%
ClassA 1,191,572 30.7% 30.7% (20,561) 0 $11.94 32.2%
Class B 905,763 29.3% 29.3% (2,396) 0 $10.87 29.3%
Class C 950,166 30.8% 30.8% 1,968 0 58.58 30.8%
BEA Market 2,203,739 25.9% 25.9% (2,762) 0 $11.65 26.1%
ClassA 1,306,304 22.0% 22.0% 10,007 0 $13.67 22.4%
Class B 594,817 35.4% 35.4% (12,769) 0 $10.80 35.4%
Class C 302,618 24.0% 24.0% 0 0 58.52 24.0%
Midway Market 3,901,085 11.8% 12.7% 23,077 0 510.21 12.7%
ClassA 1,051,485 12.5% 12.5% 4,762 0 511.51 12.5%
Class B 2,037,019 12.4% 13.4% 18,315 0 $10.25 13.4%
Class C 812,581 9.4°/a 11.2% 0 0 $9.07 11.2%
St. Paul CBD 7,594,192 23.4% 24.5% (1,998) 0 $9.85 24.5%
ClassA 2,565,792 14.7% 16.3% (1,998) 0 510.25 16.3%
Class8 4,398,907 31.0% 31.1% 0 0 59.78 31.1%
Class C 629,493 11.6% 11.6% 0 0 $8.88 11.6%
Minneapolis CBD 23,348,562 16.7% 18.0% 68,269 0 512.43 17.3%
ClassA 15,396,965 11.73% 13.3% 62,642 0 $13.40 13.3%
Class B 5,042,526 27.5% 28.4% 8,238 0 $10.45 27.5%
ClassC 2,909,071 24.7% 24.7% (2,611) 0 $9.93 24.7%
U.S. IN 8.3%
Unemployment Rate Minn esota OM 5.3%
MSP 5.3 ^/a
10.0% The national rate decreased again this quarter from 9.1% last
9.0 °/a quarter to 8.3 Both the Minnesota and Minneapolis rates
8 0
.0 followed this trend as well, as they decreased from 5.9% to 5.6%
6.0% w 1 1 1 11 1 1 T and from 5.4% to 5.3% respectively. As we move into the spring
5.0 °/a
4 1 1 1 1 1 1 and summer seasons, a decrease in metro unemployment is
4.0° /a in 7 IN 7 7 1 1 1 1 1 1 1 1 1 1 1 1 1 expected, as the rates are not adjusted for seasonal employment.
3.0% 1 1 11 1 111 111 11 111 111
2.0% T
N
1007 1008 1009 1010 1011 1012 D
c
a
C B E Page 2 N
2012, CBRE N
o
Metro Absorption Absorption 20 11 I. 24,000 SF
1,500,000
1,000,000 Overall metro absorption was positive first quarter 2012 posting 24,000 SF.
This is the fourth consecutive quarter the Twin Cities posted positive
500,000 11 11 absorption in all commercial product types, industrial, retail, and office. 3
CD
0
0
The Minneapolis CBD was the best performing market posting 68,000 SF of a
500,000 a. e bulk of positive absorption was in the class A s ector
which positive posted bsorption 63,00 SF. This is the ninth consecutive quarter the
1,000,000 Minneapolis CBD has posted positive absorption in class A. fl
c
1,500,000
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
FD
Multi- Tenant Construction Under Construction 11111 OSF There is no new speculative office construction on the horizon. This quarter
1.0 the Mozaic, a mixed use office- retail project delivered in the Minneapolis
uptown area. The project which includes 65,000 SF of speculative office
0.8 r space recently signed John Ryan Retail Marketing Agency for 12,406 SF
along with Silver Mountain Partners for 2,513 SF. This leaves the office
0.6 r component 76.9% vacant. Bar Louie Restaurant has signed a lease for
7,300 SF in the retail space on the first floor.
0.4 1- The last speculative development completed was The Offices at the West End
o built in 2009, developed by Duke Realty Corporation in St. Louis Park. This
0.2 F was also a mixed use project. The office component is currently 40% vacant
0.0 m. 111 with Baker Associates occupying the rest of the space.
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Vacancy vs. Availability Availability ME 19.
Direct Vacancy IIII 18.7%
25.00
The MinneapoliVSt. Paul office market total availability rate (available
20.00 sublease and direct space) decreased to 19.7% in the first quarter
compared to 20.8% one year ago.
15.00
In the Suburban market, availability was decreased to 19.7%, compared
10.00 to 21.2% first quarter 2011. In the Minneapolis CBD total availability
decreased to 17.3% compared to 19.6% the same time last year.
5.00
0.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
N_
C
0
CBRE Page 3 N
2012, CBRE
e
MarketView
Minneapolis /St. Paul Office
Top Lease /Sale Transactions Average Asking Lease Rate
Rate determined by multiplying the asking net
Size (Sq. Ft.) Tenant /Buyer Property Name /City lease rate for each building by its available
space, summing the products, then dividing by
449,000 (Expansion) Target Corp. Retek on the Mall, Minneapolis the sum of the available space with net leases
for all buildings in the summary.
95,000 (Expansion) SPS Commerce Accenture Tower, Minneapolis Net Leases
Includes all lease types whereby the tenant pays
an agreed rent plus most, or all, of the operating
25,000 (Lease) High Jump Software 8200 Tower, Bloomington expenses and taxes for the property, including
utilities, insurance and/or maintenance
22,000 (Lease) Southwest LRT Park Place West, Saint Louis Park expenses.
Market Coverage
20,000 (Lease) Activision 8200 Tower, Bloomington Includes all competitive office buildings 10,000
square feet and greater in size.
Lease renewal
"Sublease Net Absorption
The change in total (direct and sublease)
occupied square feet from one period to the next.
I Net Rentable Area
The gross building square footage minus the
elevator core, flues, pipe shafts, vertical ducts,
Submarket Map balconies, and stairwell areas.
Occupied Square Feet
Building area not considered vacant.
a :s 5
miles Under Construction
Buildings which have begun construction as
Northwest evidenced by site excavation or foundation work
Direct Available Square Feet
a Available Building Area which is either physically
vacant or occupied. Does not include sublease
\-7 space.
Total Available Square Feet
394 Corridor\ �bv Available Building Area which is either physically
16 I vacant or occupied. Includes sublease space.
f Direct Vacant Square Feet
Existing Building Area which is physically 3 Minneapolis Suburban St Paul G 7 Midway 9 9 P V V vacant
or immediately available. Does not include
St 94 I sublease or shadow space.
494
Total Vacant Square Feet
t Existing Building Area which is physically vacant
or immediately available. Includes sublease and
shadow space.
4iIIII .ftN1apU114
srf Paul Inn 1
t Normalization
Due to a reclassification of the market, the base,
494 Corridor number and square footage of buildings of
35 VS, previous quarters have been adjusted to match
o the current base. Availability and Vacancy
figures for those buildings have been adjusted in
Burnsville, Eagan, s previous quarters.
Apple Valley aTi.t.yla., +ppiRiver
For more information regarding the
MarketView, please contact:
Daniel Brown, Office Research
Copyright 2012 CBRE Statistics contained herein may represent a different data set than that used to generate National CBRE
Vacancy and Availability Index statistics published by CBRE Corporate Communications Department or CBRE research and
Econometric Forecasting unit, Econometric Advisors. Information herein hos been obtained from sources believed reliable. 4400 West 78th Street
C B R E While we do not doubt its accuracy, nve not verified it and make o guarantee, warranty representation s option s It Suite 200
is your responsibility to independently confirm ac
nfirm its accuracy and completeness. Any prrojeectionss, opinions, assumptions or
estimates used are for example only and do not represent the current or future performance of the market. This Minneapolis, MN 55435
information is designed exclusively for use by CBRE clients, and cannot be reproduced without prior written permission of T. 952-924-4627 F.952- 831 -8023
CBRE.
Daniel.Brown @cbre.com
i
Executive Summary
Twin Cities Commercial Real Estate Market Begins to Show
Signs of Recovery
The Twin Cities commercial real estate Business District (CBD) submarkets. uptick in construction activity. Regional
market showed signs of recovery in Investment activity continued to mall space is at a premium, as evidenced
2011, with vacancy declining across rebound in the office sector in 2011, by an overall vacancy rate of 1.3% among
most property types amid some signs resulting in more than $800 million the areas eight such properties.
of an improving economy. Market -wide, worth of sales volume. Several signifi-
vacancy declined to 15.2% for direct cant transactions closed in the second OUTLOOK
space (17.6% overall across all property half, and the pipeline of potential deals is Construction projects will be more
types)— reversing a three -year slide that relatively robust going into 2012. numerous in 2012. Retail alone will
saw direct space vacancy go from 11.5% see about I msf of new construction
in 2007 to 15.9% in 2010. The market MULTI FAMILY CONSTRUCTION in 2012, led by big -box retailers. More
recorded 1.6 million square feet of BOOM UNDERWAY multi family projects are in the works as
positive absorption, breaking a two -year Resurgent demand for rental housing demand for rental units is expected to
skid that brought the market deep into is fueling a boom in new multi family continue to grow. The market will likely
negative territory. apartment construction in the Twin also see more construction of large,
Cities. Developers added approximately single -user bulk /warehouse distribu-
BULK INDUSTRIAL DRAWS 900 new market -rate units in 2011 tion facilities to meet the needs of users
INVESTOR INTEREST and another 1,300 units are slated for who cannot find the space they need in
Large national investors showed signifi- completion in 2012. Rental rates are the current inventory.
cant interest in Twin Cities industrial rising in the face of rapidly declining va-
properties in 2011, particularly newer cancy rates, giving developers reason to The office and industrial leasing mar
bulk /warehouse product. The number invest in new construction. Much of the kets are expected to experience solid
of investment sales in bulk industrial apartment development is taking place growth in demand in 2012, mostly in the
properties was the highest seen in the in urban areas such as the Minneapolis second half of the year. Investors may
Twin Cities in more than a decade, CBD and the Uptown area in south broaden their search for more Twin
including at least 10 high profile deals. Minneapolis. Cities opportunities in 2012, while the
Institutional investors are again look- supply of lender -owned office proper
ing closer at investment opportunities RETAIL PROPERTIES BENEFIT ties put back on the market for sale will
in the Twin Cities, including well -posi- FROM MEDICAL SPACE USER also likely increase. Well- positioned re-
tioned grocery- anchored retail centers DEMAND tail centers can anticipate improvement
and multi family properties Healthcare providers have been locating in demand, including from some medical
patient friendly primary care and spe- space users.
DEAL MAKERS DELIGHT cialty practice clinics in high profile retail
IN OFFICE MARKET sites, taking both existing second- gener-
Large office space users were active in ation retail space and also building new MORE ONLINE
the Southwest submarket, which posted locations on land adjacent to existing More information by submarket
456,000 sf of positive absorption for the centers. Retail center owners are more and /or product type, including:
year, its highest number in more than open to accommodating medical space .Vacancy, absorption and rental
decade. The overall Twin Cities market users given existing market conditions. rates
experienced 484,000 sf of absorption.
Class A property owners were the Vacancy among all retail property types Transaction activity
main beneficiaries, and increased de- is 8.4% for direct space, down from 9.8% Investment sale activity
mand for class A space was also evident at year -end 2010. Major retailers are ex- Projections for the next 6 -12
in the West and Minneapolis Central panding in the Twin Cities area, fueling an months
CUSNMAN N�RTH w
Submarket reports available at ww.northmargcompass.com 1
WAKEFIELD; Real Estate 5ervices