This article takes a brief look at the northeast and northwest commercial real estate markets of the Minneapolis-St. Paul area highlighting a few of the suburbs with interesting activity. We are in the midst of the COVID pandemic and so it is challenging to predict the future; but this is what we know now.
This geography is of particular interest to us as KimbleCo has a couple of exceptional buildings listed in this market as well as a consulting contract and so we are keeping our eyes on what is happening (Check out KimbleCo’s listings in the north metro).
Industrial
Generally, in the Twin Cities the industrial market is solid with stable rents and low vacancies. In terms of leasing, the northwest and northeast suburbs are leading the way, especially in 32’ clear buildings (source: MNCAR Quarter 1 Market Trends Report - Industrial ). Out of 5 submarkets with 2.3m sf of new leasing, the north markets captured 1,350m sf in the first quarter of 2020.
Janice Gundlach, City of Roseville Community Development Director notes, “The north metro has gained a lot of momentum over the last 10 years, especially in terms of higher-tech, industrial flex or medical device manufacturing users. I think the attraction stems from more affordable land and great access to both downtowns of Minneapolis and St. Paul. Of course, in Roseville, we are blessed with lots of amenities that are attractive for workers.”
Office
The office market in the Twin Cities is also generally stable but a bit less robust in the north markets. Two notable 1st quarter 2020 transactions included the 6499 University Avenue NE property in Fridley (a KimbleCo listing) which leased 37,000 sf to Benedictine Health Care for its new corporate headquarters and Shoreview Corporate Center leased 35,000 sf to Progressive Insurance.
The future will be interesting as companies decide if alternative ways of working will continue to be the norm for all or a part of its workforce. Will home officing continue for some 100% of the time or part of the time? Will the trend towards less square feet per person now increase to provide greater distancing for health? Time will tell but our prediction is that there will be an impact into the future as a result of the pandemic of 2020.
Multifamily
New multifamily projects continue to pop up everywhere with a renewed focus on providing affordable housing for all ages. Some of the more established suburbs with less developable land are hungry for new market rate product as well as affordable and workforce housing.
New and Upcoming Development Highlights
This by no means is a comprehensive look at the north metro – and the north metro can be described in a variety of ways. Here are a few key new developments around the area:
Brooklyn Center: We are particularly impressed by the city’s careful attention to the opportunities their well-located undeveloped land represents. This is a city focused on creating smart economic development that supports their constituents while bringing growth and amenities to the area that all can enjoy. With the massive former Brookdale site on the docket to be developed, this will be a community to watch.
According to Meg Beekman, Community Development Director, “Brooklyn Center’s planning and economic development efforts have shifted dramatically in the last few years. The City’s leadership has taken a community-based approach and the result has been a shift away from old development patterns and a focus on transit-oriented development, mixed uses, and celebrating the rich diversity of the community. Shifts in the retail market have left significant redevelopment opportunities which have the potential to provide new housing options and bring new amenities and services to the community, and the City has taken a proactive approach to ensuring that new development serves the community and provides far reaching benefits.”
Columbia Heights: The Opus Group beat out three other developers to buy 8.3 acres of land in Columbia Heights from Hennepin County and Canadian Pacific Railroad. Opus proposed a 100,000-square-foot industrial building with a small amount of office space.
Roseville: Plymouth-based Dominium hopes to begin construction this summer on Twin Lakes Station, a proposed 21-acre, mixed-use development that would include two multifamily apartment buildings with a total of 228 units, a 277-unit senior housing complex, and 55,000 square feet of commercial space. The project would deliver more than 500 new affordable housing units to Roseville.
Fridley: Development plans have been approved by the City Council to allow the construction of a 135-unit senior “with services” building at the former City Hall site at 6431 University Avenue NE. The building will be a mix of independent, assisted and memory care units that will operated by Ebenezer Homes.
For more on north metro developments see this piece by the Star Tribune.
Steady and stable with redevelopment and new development; the north metro is healthy!