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k EJRKLAF ® An increasing demand for space and decreasing supply of space has set in motion new development plans totaling over 7 million square feet at last count. MARKET 10.9% in 1994 to an all-time low of 7.9% INDUSTRIAL MARKET HIGHLIGHTS for third quarter 1995. OVERVIEW INDUSTRIAL the BULK market absorbed ♦ Overall vacancy rate dropped to 366,052 sq. ft. and its metropolitan Three years of strong annual an eleven-year low of 7.1% vacancy rate declined slightly,from 7.8% absorption has resulted in record-low in 1994 to 7.1% for third quarter 1995. vacancy rates for nearly every sector of ♦ Annual absorption of 1.7 million Considering its peak vacancy rate in the industrial market. The combined sq.ft. reported for Metro Area 1992 was 19.6%, the BULK market has metropolitan total vacancy rate declined greatly improved. to an eleven-year low of 7.1%. This ♦ Developers propose new projects of iVletro-average asking rents in- steady absorption has lowered the more than seven million sq.ft. creased slightly in virtually all product overall vacancy rate an impressive 11.6 types. In the BULK market, office rents entage points from its peak of 18.7% ♦ Office tiY'arehouse is healthiest rose 4.2% to $6.89 psf and warehouse 990, product overall The industrial market continues to rents increased 6.5% to $3.40 psf. experience a tremendous level of activi- and 2.1 million sq. ft. in 1993. The Twin tv. The increasing demand for space and Cities'largest sectors,the Southwest and POTENTIAL DEVELOPMENT the decreasing supply of space has gener West, continued to dominate the BY SECTOR aced over seven million sq. ft. of marketplace absorption. The Southwest proposed industrial developments. The absorbed 591,000 sq. ft., the West proposed new development includes absorbed 381,000 sq. ft., and the Dakota ScoTT COUNTY 60,000 SF build-to-suit projects for sale and for Countv Sector was close behind with lease, as well as speculative multi-tenant 360,000 sq. ft. of annual absorption. WASHINGTON COUNTY 317,500 SF projects. More specifically,518,000 sq. ft. An overall review of the multi- CARVER COUNTY 500,000 SF of multi-tenant projects were completed tenant industrial market revealed the this past year and added to the Towle O/W market was the strongest NORTHWEST 520,000 SF Report survey. performer with 837,054 sq. ft. absorbed. Industrial building acquisitions are This resulted in an improvement in the SOUTHWEST 591,000 SF continuing at a healthy pace. Over the O/W metropolitan vacancy rate from o ° ANOKA COUNTY 638,000 SF past year, AMB Institutional Realty 9.2% in 1994 to 6.5%' .5/° for third Advisors and First Industrial Realty quarter 1995. NORTHEAST 666,000 SF Trust Inc. both added properties to their Although the OS/BC market has local multi-million square foot portfo- lagged behind the other markets in its ' "' lios. Additional industrial transactions recovery, its absorption of 581,760 sq. ft. were completed by several other institu p 'laced it a close second to the O/W 1,327,000 SIF tional buyers and local investors. market. Far from its vacancy-rate peak DAKOTA COUNTY , Net absorption for the combined of 16.4% in 1992, this year's strong metropolitan area totaled 1.7 million sq. absorption resulted in a decrease in the 0 .5 1 1.25 1.5 1.75 �mpared to 2.1 million sq. ft. in 1994 OS/BC metropolitan vacancy rate from TOTAe RDEVELOPMENT PLANNED=7.4 MILLION 50.FT. III