2012 Global Market report - NAI Global

Minneapolis/St. Paul, Minnesota
Jackson, Mississippi
Contact
NAI Global
+1 609 945 4000
Everest Real Estate
Advisors
+1 612 424 7542
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
Median
Household Income
3,313,924
3,454,156
1,901,441
$86,226
$66,937
The Twin Cities Metro Area (TCMA) enjoys a diverse
employment base of medical technology, finance, agriculture,
food processing, printing and publishing, manufacturing,
health care, education, arts and entertainment. Although
manufacturing plays a major role in the economy
Minneapolis hosts a large white-collar employment sector,
a large high-technology sector, a well-educated work force,
high household incomes and rates of population growth
more than twice the overall rate for the Midwest.
A gradual recovery is taking place in the TCMA office
market. Vacancy has decreased slightly with asking rates
up slightly year-over-year. However, owners are offering 3
to 12 months free rent impacting the effective rate. Notable
transactions include a 153,750 SF lease by Ecolab University,
76,728 SF lease by Agri and a 75,121 SF lease by Wells
Fargo.
In the industrial market, only 290,000 SF of new space
came online in 2011; this subdued activity prevented
vacancy from getting out of hand. Vacancy, while still
elevated, has decreased slightly and rent growth has
improved slightly. Notable leases included the 129,508 SF
lease by Great Northern and the 129,120 SF lease by
Magno.
The apartment market is flourishing, ranking as one of the
top markets in the country. With absorption surging to 6,400
units in 2010 and the vacancy rate below 3% across the
market, the fundamentals are strong. The net market rate
absorption through September was 2,950 units. There were
just 560 units of new supply. Vacancy in the TCMA ended
Q3 at just 2.3%, down 190 bps. 10,000 units have been
announced for delivery over the next 12 to 36 months which
will impact demand over the next two to four years.
The 64 million SF retail centers are experiencing high
vacancy rates and lower rental rates. Owners are putting
more money into TI’s in order to get deals done. Positive
signs in the market include Target’s acquisition of up to 220
leases of Zellers, Dish Network’s purchase of Blockbuster
Video’s assets after its bankruptcy and Whole Foods’
addition of two locations in the TCMA. It is expected that
progress in this market sector will be slow in 2012.
Contact
NAI Mark S. Bounds
Realty Partners
+1 601 856 7377
Metropolitan Area
Economic Overview
2011
Population
2016 Estimated
Population
Employment
Population
Household
Average Income
Median
Household Income
541,749
551,830
265,335
$63,736
$45,770
Jackson, Mississippi, anchor of the metro area, ranked third out
of America’s 100 largest metro areas for the best “Bang for Your
Buck” city according to Forbes magazine. The study considered
affordability, housing rates, etc. Jackson’s economy finds
its stability and strength in three main sectors: government,
healthcare and education. The state has continued success in
drawing companies that service the auto manufacturing,
telecommunications and government industries with a new
sector seeing light: clean energy.
Five companies, four of them new to Mississippi, are committed
to manufacturing clean energy or clean energy related products
in different areas of the state. Lockheed Martin has assumed
33,000 SF on the 4th floor of the former WorldCom building
(South Pointe Business Park) as a new mission support center.
Laclede Chain Manufacturing Company has bought a former
automotive plant in Ceres Industrial Park (Vicksburg) with full
production to begin within a year. Capital City Beverages signed
a 10,000 SF lease located in the Madison/Ridgeland market.
Fred’s Discount Store began its lease of a 17,000 SF space in
Ridgeland, as well.
Across the board, vacancy rates have increased while rental
rates have decreased for the industrial, office and retail
sectors. The average asking rental rate for all types of office
space in the Jackson Metropolitan Statistical Area is
$16.81/SF per year with a vacancy rate of 11.2%, an increase
from the 10.9% rate seen in Q4 of 2010. The average asking
rental rate for industrial space is $3.50/SF per year. The overall
vacancy rate for industrial space stands at 14.2%, up from
12.7% in Q4 of 2010. Flex space has a vacancy rate of 15.4%
(14% Q4 2010) and warehouse space has a vacancy rate of
14.1% (12.6% Q4 2010). The average asking rental rate for
retail space is $9.27/SF per year; this reflects a 7.87%
decrease from $10/SF in Q4 2010 and is a 2.1% decrease
from $9.47/SF in Q2 2011.
Total Population
Median Age
35
Total Population
Median Age
33
Minneapolis/St. Paul At A Glance
(Rent/SF/YR) low High effective avg. Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
N/A
$ 10.00 $
N/A
35.00
N/A
$ 15.08
N/A
12.80%
Class B (Secondary)
suburban offIce
New Construction (AAA)
$ 5.00
N/A
$ 30.00
N/A
$ 13.69
N/A
19.80%
N/A
Class A (Prime)
$ 10.00 $ 34.00 $ 19.12 15.90%
Class B (Secondary)
IndustrIal
$ 5.00 $ 30.00 $ 16.10 15.50%
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
$
$
$
3.50
4.00
2.00
$
$
$
5.35
9.50
25.00
$
$
$
4.55
7.50
5.40
10.70%
10.10%
20.20%
Downtown
Neighborhood Service Centers
Community Power Center
$
$
$
5.00
5.00
6.10
$
$
$
55.00
30.00
30.00
$ 19.17
$ 15.99
$ 17.29
17.90%
10.30%
7.70%
Regional Malls
$ 11.23 $ 25.74 $ 18.04 4.30%
deVeloPment land Low/Acre High/Acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Jackson At A Glance
(Rent/SF/YR) low High effective avg. Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
Flex
retaIl
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
$
$
$
$
$
$
$
$
$
$
$
$
25.00
25.00
14.00
25.00
16.67
13.33
2.82
2.00
4.02
N/A
6.13
14.00
15.43
$
$
$
$
$
$
$
$
$
$
$
$
30.00
30.00
17.00
30.00
25.46
16.58
5.85
3.00
9.04
N/A
14.48
18.45
32.00
$
$
$
$
$
$
$
$
$
$
$
$
25.00
27.00
17.00
27.00
19.46
15.89
3.22
2.50
7.75
N/A
8.75
17.22
21.05
N/A
N/A
N/A
N/A
17.70%
10.50%
14.10%
N/A
15.40%
N/A
11.10%
1.50%
1.50%
deVeloPment land Low/Acre High/Acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
$
$
$
$
$
217,800.00
108,900.00
20,000.00
87,120.00
217,800.00
N/A
$
$
$
$
$
348,480.00
152,460.00
60,000.00
174,240.00
348,480.00
N/A
2012 Global Market Report n www.naiglobal.com 108