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<br />TWIN LAKES, Roseville, Minnesota
<br />Market Assessment & Demand Analysis
<br />
<br />Office Market Assessment
<br />
<br />improvement, but considerably less robust than the job growth which occurred during
<br />the late 1990s (35,000+ jobs per year).
<br />
<br />. In recent years, higher productivity (i.e. getting more done without adding
<br />employees) has been seen as one of the reasons for the slow recovery in office
<br />demand. Nonetheless, office-related employment is projected to pick up in 2005 and
<br />2006. In particular, office growth is expected to be stronger among small and mid-
<br />sized companies. This trend bodes well for the office/retail buildings in Twin Lakes.
<br />
<br />. Meanwhile, higher employment is expected in the educational and healthcare
<br />industries, with some (but less substantial) growth in business and professional
<br />services, fmance and government.
<br />
<br />. The United Properties report expresses optimism for office market in the year ahead.
<br />Demand has picked up regionwide, particularly in suburban markets. Quality
<br />buildings in suburban locations with good access to transportation corridors are
<br />expected to outperform that balance of the market in the immediate future. United
<br />Properties predicts 2005 regional absorption of 800,000 to 1,000,000 square feet, with
<br />a 1-2% decline in vacancy rates by year end and a reversal of the steady decline in
<br />rental rates seen in recent years.
<br />
<br />
<br />Office Market - Vacancy and Absorption -- 2nd Half 2004
<br />
<br />Sector
<br />Northeast
<br />Northwest
<br />Mpls CBO
<br />St. Paul CBO
<br />Southl Ai rport
<br />Southwest
<br />West
<br />Twin Cities Total
<br />
<br />Net
<br />Rentable
<br />Area
<br />6,906,111
<br />1,669,912
<br />26,046,909
<br />7,652,832
<br />5,150,404
<br />13,420,204
<br />8.515.047
<br />69,361,419
<br />
<br />* Including sublease space.
<br />
<br />Vacant Space
<br />wi Sublease
<br />994,480
<br />328,973
<br />6,042,883
<br />2,119,834
<br />906,471
<br />2,335,115
<br />1.609.344
<br />14,337,100
<br />
<br />Source: United Pro erties Market Outlook
<br />
<br />Vacancy
<br />Rate*
<br />14.4%
<br />19.7%
<br />23.2%
<br />27.7%
<br />17.6%
<br />17.4%
<br />18.9%
<br />20.7%
<br />
<br />(
<br />
<br />2004
<br />Absorption
<br />104,527
<br />75,380
<br />(178,233)
<br />148,910
<br />(38,085)
<br />372,641
<br />37.316
<br />522,456
<br />
<br />GV A Marquette Advisors
<br />
<br />Page 50
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